The company has stepped up its investments in financial securities and its investments jumped by 290 per cent to Rs 612.05 crore from Rs 156.63 crore. The company invested Rs 253.62 crore in units of Mutual Funds and Rs 150 crore in non-convertible debentures during 2003-'04. This may generate higher other income for the company in the 2004-05.

The company is managing its business with 15 plants in India, two plants in UK and one in China. DRL has set up 23 subsidiaries in the domestic and international markets. It has an investment of Rs 207.72 crore in the subsidiaries as at the end of March 2004. Export earnings moves up to Rs 982 cr

DRL's exports on FOB basis increased by 6.8 per cent to Rs 981.55 crore from Rs 919.29 crore. Exports to net sales worked out 59 per cent for the year ended March 2004. It is focusing more on advanced markets like US and Europe. It is also expanding markets in Russia, Latin America, China and South Africa. The company has acquired Trigenesis Therapeutics Inc, a US based Dermatology Company at a consideration of Rs 49.67 crore. The company has established its own warehouse/distribution center in South Carolina. It has entered into an alliance with Pliva, a leading Croatian pharmaceutical company for accessing regulated markets. DRL also entered into Brazil by launching its oncology franchise and currently selling three products.

Conclusion

The company management is taking steps to improve its performance by investing more and more funds in R&D activity as well as expansion of markets. The uncertainty regarding approvals, high risk in launching new products and legal battles may put pressure on working. During the year 2003-04 the company has incurred large expenses on legal fight in US on Pfizer's Norvasc.

It will be difficult to improve profit margins in immediate future with rise in sales of APIs. It should try to improve its sales of more profitable products from generics and formulations in the international markets. Currently, there is stiff competition for generic products in the international markets. It already suffered a major setback in first half of 2004-05. However, the large investments in interest bearing instruments may help to push its other income and reduce burden on bottomline. The company is also taking steps to consolidate its operations in other countries including China. Further the company is planning to increase the number of ANDAs to be filed in the regulated markets.