update

Granules calls for greater Indian regulatory efficiency; EU API demand drove Q2 gains

By Gareth Macdonald

- Last updated on GMT

Related tags Capacity utilization Europe Generally accepted accounting principles

Granules capacity utilisation efforts drive Q2 profits
Granules capacity utilisation efforts drive Q2 profits
API, drug intermediates and formulations firm Granules India ended the second quarter of fiscal 2013 with higher revenue and profit thanks to gains made by all three of its units.

The Hyderabad, India-based firm reported a 52% increase in net revenue – to INR2.6bn ($43.5m) – and a 87% surge in net profit – to INR1.5bn – for the three month period ended September 30.

Granules said the gains were driven by “driven by strong performance across all three verticals” and cited the ramp up of production and capacity utilisation at its newly opened formulation facility in Gagillapur as one of the most important factors.

Spokesman Vijay Ramanavarapu  told in-Pharmatechnologist.com that: "Our API business continues to improve due to improvements in manufacturing efficiencies. We are focusing on using our API production for captive consumption in our Finished Dosages and PFIs and expect this trend to continue to increase.

He also explained that the West continued to be a key market for Granules and hinted that the firm may increase API production capacity to meet this demand.

"As for regions, we are continuing to see strong demand in Europe which is our primary API market. Demand for our products is steadily increasing. We are actively working on de-bottlenecking our API capacity and will continue to see incremental improvements in our capacity. In the long-run, we expect to add more API capacity.

European demand

In July​ European laws came into effect which require all APIs shipped to the continent be accompanied by written confirmation they were produced to appropriate standards by local regulators.

While this did not impacted Granules, other Indian API makers had to wait to the last minute to receive the necessary regulatory documents according to Ramanavarapu.

"We [Granules] received the certification in time and haven’t been impacted. The Indian government took longer than most authorities to get clarity on the topic which resulted in many companies getting written confirmation shortly before the deadline,"​ he said. 

Ramanavarapu also suggested that Indian authorities could learn from regulators in other countries where manufacturers also faced potential restrictions as a result of the new European laws.

"In contrast, the Chinese government was much more effective and Chinese API producers were able to provide a better peace of mind to its European customers. The government needs to be more efficient so we can serve our customers​."

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