Omkar Herlekar, Whole time Director, Omkar Speciality Chemicals Ltd IndiaInfoline (05/30/2015)
"We are certainly open for a suitable acquisition, particularly in Formulation space. We have already spent around Rs. 400 crs on capex for enhancing of capacities."
Omkar Herlekar, Whole time Director, Omkar Speciality Chemicals Ltd is a Bachelor of Science and Master of Science (By Research) in Chemistry from the University of Mumbai. He has an overall experience of 7 years. He spearheads the Research & Development activities of OSCL and supervises the entire factory operations. He is also actively involved in the setting up and implementation of new manufacturing units of the Group. He has the ability to sequester a project within a vertical and then analyze it threadbare on various dimensions with elan, including strategic, financial, marketing, R&D and branding.
Omkar Speciality Chemicals core business is manufacturing of niche lifesaving intermediates, Active Pharmaceuticals Ingredients (APIs) and Veterinary Growth enhancers. Head quartered at Thane, OSCL has nine units in the state of Maharashtra, India with over 1,100 workforce. The company is fully backward integrated and has an installed capacity of 4,920 MTPA. The Company’s product segments include Iodine Compounds, Selenium Compounds, Intermediates, Resolving Agents, Veterinary Growth Enhancers and APIs which comprises of more than 200 products. The company’s association with leading organizations in India and abroad has enabled it to broaden its business, to expand the existing product range and to develop new molecules as per the specific requirements of customers.
Replying to Yash Ved of IIFL, Omkar Herlekar says "We are certainly open for a suitable acquisition, particularly in Formulation space. We have already spent around Rs.400crs on capex for enhancing of capacities."
Brief us about your Financials?
The company reported a healthy increase of 63.25% in its Net Profit to Rs. 5.42 crore for Q4FY15, as compared to Rs. 3.32 crore in the corresponding quarter of last fiscal. The company’s PAT margin improved from 4.49% in Q4FY14 to 7.34% in Q4FY15.
Total Income for the quarter ended March 31, 2015 stood at Rs. 73.89 crore, as compared to Rs. 73.94 crore in the same period last year.
OSCL’s Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) in Q4FY15 stood at Rs. 14.04 crore, up 21.45%. The company’s EBITDA margin improved from 15.63% in Q4FY14 to 19.00% in Q4FY15.
For the full year period ended March 31, 2015, OSCL’s net profit jumped by 79.06% to Rs. 24.28 crore, as compared to Rs. 13.56 crore of the year ago period. The company’s PAT margin improved from 5.64% in FY14 to 9.16% in FY15.
Total income for FY15 stood at Rs. 265.13 crore, recording a rise of 10.34% as compared to Rs. 240.28 crore during FY14. OSCL’s EBITDA in FY15 stood at Rs. 52.17 crore, up 21.50%. The company’s EBITDA margin improved from 17.87% in FY14 to 19.68% in FY15.
You have recently bagged order worth Rs. 100 crore?
We have recently bagged orders worth around Rs.100crs. from our existing customers for products which were recently received by us during last Financial Year. Even though we did good business with these products last year, some of the customers with regulatory approach had purchased the products on trial basis from us and these products had gone through the approvals and validation stages at their end. We have now received approvals from many of these customers and they have started placing commercial orders with us.
Are you in race for big orders?
We are certainly looking for bigger orders with a view to utilize our capacities which are expected to be launched during this Financial Year at optimum level. We have also a number of new products ready with us which will also be launched during the Current Year.
What is your outlook on the Pharma industry?
Pharma Industry is related to healthcare of the population has been steadily going at 12-15% p.a. Domestic Pharma Industry in India is also growing at similar pace on account of population growth and also exports to Western countries. A new dimension of the growth of pharma industry has been added on account of lifestyle diseases such as diabetes, cholesterol issues, cardiac issues, hepatitis, etc. In addition to the ongoing generic drugs, new drugs are developed by Innovator companies and are launched every year. In general, the outlook for pharma industry is quite promising on global basis and particularly in India.
How many products are you planning to launch for the current fiscal?
We are planning to launch 5-6 new products during the current fiscal which will have applications in pharma industry for veterinary and human applications.
Any plans to expand regions globally?
We are currently exporting our products to around 40 countries globally and we do have plans to expand our business to further regions such as Souch Africa, Australia, New Zealand, etc.
What are your acquisition plans?
We are certainly open for a suitable acquisition, particularly in Formulation space. This is because we already have certain APIs ready with us can add value.
What is your revenue mix?
The major contribution in revenues comes from Commodity Iodine Derivatives (45%) followed by Speciality Chemicals (30%) and APIs (35%). Going forward, the major focus will be on APIs and Speciality intermediates which normally give us higher margins thereby supporting our profitability.
Comment on your Capex plans for this fiscal year?
We have already spent around Rs.400crores on capex for enhancing of capacities from 700MTs to 10,000 MTs p.a. Out of this, 4920 MTs has already become operations and remaining capacity will become operational during the current Financial Year. The capacities which are going up will recently occupied with the products and the customer base available with us. Hence, we are not going to incur any high amount for creation of additional capacities at this stage. However, we will be doing a capex close to Rs.30-35crores towards completion of ongoing facilities and up-gradation of our facilities for making them compliant with FDA and Regulatory requirements.