Mumbai-based Ajanta Pharma Ltd has retired term loans amounting to Rs.7 crore for the current financial year (April 2003-March 2004). It secured an interest advantage of about 2 per cent in the repayment of the loan as the banks and financial institutions agreed to bring down the interest rate to 12 per cent from 14 per cent at the time of securing the loan. After the retirement of the loan, the company's current debt remains close to Rs.60 crore.

The company is constantly negotiating with creditors, banks and financial institutions for an even better interest rate, considering the bullish state of the Indian economy.

Even a year ago, it was hopeful of an interest rate advantage of 5 per cent. It had thought of debt-repayment mixing rupee with foreign currency. However, the RBI imposed restriction on debt retirement using foreign currency has dampened the spirits of the company. "The foreign reserves has surpassed $100 billion in the country and the economy is in good state. At this point of time, the RBI does not want corporates to repay their loans using cheaper foreign currency, which will affect the domestic banks," said Arvind Agarwal, CFO, Ajanta Pharma.

The debts have been accumulated over the past 3-5 years. The company borrowed in order to meet its financial requirements in its aggressive expansion activities in the overseas-unregulated markets, along with its domestic manufacturing, R&D and other investments.

However, off-late Ajanta has been showing growth on the sales front. It posted a healthy growth of 28 per cent in its sales at Rs.31.93 crores during the quarter ended September'03 compared to Rs.24.89 crores in the same quarter of last year. This was on the back of a strong 55 per cent growth in exports, which has contributed 71 per cent of the total turnover. The sales for the first half year was at Rs.55.84 crores (Rs.42.83 crores) indicating a growth of 30 per cent over the same period of the previous year.

The net profit for the period was at Rs.89 lakhs against Rs.50 lakhs indicating a growth of 80 per cent. The net profit for the half year ended September 03 was higher at Rs.1.29 crores (Rs.71 lakhs).