Aim to see turnover of USD 5 bn by 2020: Cipla Chairman

Cipla  is targeting a turnover USD 5 billion by 2020, the company's chairman YK Hamied said in an interview with CNBC-TV18.

Net profit jumped 90 percent year-on-year to Rs 500 crore for the quarter ended September 2012. Hamied attributes two factors to the strong performance.

Also Read: Cipla Q2 net profit jumps 90% to Rs 500 cr

"Firstly, we have embarked for the last six months on series of rationalisation procedures, changing the organisational structural of the company. Secondly, once in a while you hit the jackpot. So, we have had a one time achievement that has contributed a lot to the bottom-line," he said.

Below is the verbatim transcript of YK Hamied's interview on CNBC-TV18

Q: It has been an absolutely spectacular performance for you this quarter. The profitability is up 62% to Rs 500 crore and your margins too have expanded to 31%. Can you take us through the highlights and what went so correct this quarter?

A: If you look at another figure, 56% of our turnover this quarter has been export and 44% has been local. So, that has been an important change. It used to be 50%-50%. We get better margins abroad than in India. With the price control in India more of the Indian companies are now concentrating on exports.

Q: Have you seen any sort of exceptional bottom-line in this quarter or was it just an operational performance which helped you clock Rs 500 crore of profit?

A: Two things contributed to that. Firstly, we have embarked for the last six months on series of rationalisation procedures, changing the organisational structural of the company. So, that has been one major factor of reorganisation and restructuring of the management of the company. Secondly, once in a while you hit the jackpot. So, we have had a one time achievement that has contributed a lot to the bottom-line.

Q: These margins of 31% and profitability figure of around Rs 500 crore - is it sustainable or is this aberration that we have seen in this quarter? What would your guidance be for the remaining part of the fiscal for FY13?

A: Rs 500 crore on a turnover of Rs 2,100 crore is quite exceptional. It cannot be sustained on an indefinite period, but we will still manage pretty well. I can't guarantee that we will be down and out, but I can already tell you that the third quarter that has started has been on a quite a promising note.

Q: Is margin performance of 31% something sustainable? How exactly is the Indore SEZ doing at this point in time? What sort of scale up in margins could we see or would you just stabilise between this 27%-31% odd mark?

A: The Indore factory was inspected by the USFDA last week and it has got approved. So, that has been a very good point. Shortly, products from there could find their way internationally. That is one good factor. Moreover in Indore, we have a built-in capacity which will hold us in good stead for the next few years to come. It's like a reserve, having an extra tank full of petrol for the future because our targets are quite high. We hope to achieve a turnover of USD 5 billion by the year 2020. It's not far to go. This year, by March 2013, our target is Rs 8,000 crore - that is about USD 1.5 billion.