Enhanced growth and profitability in the bulk API and formulation business segments enabled Orchid Chemicals and Pharmaceuticals Ltd to register a 19 per cent growth in turnover for the quarter ending September 30, 2002. Orchid registered a turnover of Rs 111.33 crore as against Rs 93.76 crore in the corresponding quarter of FY 02. Net profit after tax stood at Rs 2.89 crore compared to Rs 2.66 crore during the corresponding quarter of the last fiscal.

Total revenues of the company for the half year (H1) ended September 30, 2002 stood at Rs 218.17 crore registering a growth of 19.5 per cent over the corresponding period of last fiscal. Earnings before Interest, Depreciation, Tax & Amortization (EBITDA) stood at Rs 44.56 crore compared to Rs 48.86 crore during H1 FY 02. Profit after tax was Rs 5.8 crore as compared to Rs 8.17 crore of the corresponding half year of last fiscal.

The Company has decided for an early implementation of Accounting Standard 26 (Intangible Assets) issued by the Institute of Chartered Accountants of India. Accordingly, the financial results for the half year of this fiscal have been prepared in line with the new Accounting Standard AS-26. Due to the early implementation of AS-26, the profits for the first half of this fiscal are lower by Rs 3.34 crore.

Further, in line with the said standard, the deferred revenue expenditure of Rs 29.71 crore which includes amongst others, Research & Development, Product Registration and Development expenses outstanding as at March 31, 2002 has been set off against the reserves. The opening reserves now stand at Rs 271.67 crore.

There has been an all-round business development and growth in Orchid's formulations business during this fiscal. Orchid Healthcare, the formulations division registered a growth of 150 per cent with sales of Rs 26.39 crore for the half year as against Rs 10.57 crore registered during the corresponding period of last fiscal. The division registered a profit during the half year ended September 30, 2002 as against the net loss sustained in the corresponding period of the previous fiscal. Formulation exports stood at Rs 10.77 crore compared to Rs 2.3 crore of H1 last fiscal, registering an increase of 368 per cent. The domestic formulations business grew significantly by 89 per cent with sales of Rs 15.62 crore as compared to Rs 8.27 crore registered during the corresponding half year period of FY 02.

The upswing in the formulations business has primarily been due to several new product introductions and a significant shift towards high-end formulations. Zopercin, a high end broad spectrum formulation combining Piperacillin and Tazobactam launched in September 2002, has already created a significant market presence. This follows the significant market impact generated by the earlier launched formulation combining cefoperazone and sulbactum (Cebanex). Orchid is also implementing several co-marketing tie-ups with select leading formulation players in the country.

The core cephalosporin API business registered a turnover of Rs 200.04 crore (including captive sales) and continues to contribute a large share of the revenues. Product mix optimisation in favour of high-end APIs at the Chennai facility and launch of new nutraceutical product from the Aurangabad facility supported the revenue growth. New US FDA compliant plants in Chennai for oral and sterile cephalosporins APIs are nearing completion and will contribute significantly to turnover and profitability in 2003.