Thursday, July 27, 2006
Hyderabad Buisness News July 27th,2006
Dr Reddy’s net more than doubles
Hyderabad, July 27: Strong generic drug sales and contributions from recent acquisitions in Germany and Mexico helped Dr Reddy’s Laboratories Ltd post a net profit of $30 million (Rs 139.8 crores) in the first quarter of 2006-07, against the net loss of $5.3 million in the immediate preceding quarter, and the net profit of $8 million (Rs 34.7 crores) in the first quarter of 2006-07. The earnings figures surpassed analysts’ expectations and lifted Dr Reddy’s shares by 3.3 per cent to Rs 1,367.30 in trading on the BSE on Thursday.
Revenues increased by 151 per cent to $306 million (Rs 1,404 crores) from the $122 million (Rs 569.1 crores) in the first quarter of 2005-06. Mr G.V. Prasad, Dr Reddy’s CEO, told reporters that the sale of “authorised” generic versions of Merck’s Zocor and Proscar contributed Rs 334.6 crores.
The company launched simvastatin and finastride, the generics of Zocor and Proscar, in the United States on June 23, after Merck’s patent on the two “innovator” drugs expired. Simvastatin is indicated for lowering cholesterol, while finastride is indicated for the treatment of prostate enlargement.
Mr Prasad, and K. Satish Reddy, managing director and COO of the company, said that the company expects to maintain the first quarter momentum in the sales of the two generics. Merck’s “authorised” generic for Zocor has a 180-day marketing exclusivity. Dr Reddy’s will be manufacturing both generics in Hyderabad after the 180-day period. The company will be sharing its revenue from the two generic drugs with Merck, though Mr Prasad declined to elaborate on the financial arrangement. Exports contributed 83 per cent of Dr Reddy’s revenue in the first quarter, accounting for Rs 1,171 crores of the total sales, while revenues from India rose by 15 per cent to Rs 240 crores.
Mr Prasad said that while sales of the authorised generics, which contributed 24 per cent of revenues, are expected to be good, a decline was to expected after the end of the exclusivity period. Meanwhile, the company is expecting to get approval for an “authorised” generic of ondansetron, whose patent is held by GSK. Ondansetron is used to prevent nausea and vomiting caused by cancer chem-otherapy, radiation therapy, anesthesia, and surgery.
Mr Prasad said Dr Reddy’s acquisitions, of Roche’s API assets in Mexico and betapharm in Germany, contributed 23 per cent of the revenues during the first quarter. According to a company release, Dr Reddy’s investments in R&D had declined four per cent of total revenues against the nine per cent Y-o-Y.
Rising wages do not faze IT workers
The English-language media have always had a bee in their bonnet about the Pay Commissions and hold junior government employees responsible for our Budget deficits and fiscal impropriety. Yet, at the same time, the same reporters celebrate the million-dollar salaries that are now being freely handed out at IIM campuses and also gush over the stratospheric compensation of IT professionals.
If the recommendations of successive Pay Commissions have squeezed our national exchequer, I can say with a strong element of conviction that the grossly-overpaid IT professionals are squeezing the bottom line of our technology industry. Dalal Street has pointedly given a thumbs down to IT companies who continue to molly coddle their employees by paying them more than they deserve. But our IT professionals, many of who are known more for their greed rather than their professional abilities, don’t seem to care as long as they are guaranteed a 20 per cent year-on-year increment when our industrial workers have to make do with a mere pittance.
Friends in the recruiting industry tell me that the bare minimum demand of an IT professional to consider a new job is a 50 per cent escalation in salary. Considering that most of these fickle professionals effect job changes almost every year, they
end up experiencing a five-fold increase in their compensation in four years! Still they remain restless probably realising that this wanton party won’t last too long. Compare this with a mid-manager in a manufacturing company, whose salary probably doubles over a ten-year term.
The digital divide in India is breeding simmering discontent among our non-tech salaried classes which may soon come to the surface unless most of our IT professionals take stock of the damage that they are inflicting to the bottom line of their employers which has the potential of turning India into an economically unviable destination. Steve Jobs read the signals early and cut his losses. This could well pan out into a trend.
SALARY BENCHMARKS
To ascertain the widening gap in salaries between IT workers and those in other industries, I researched about a hundred bio-datas on several job portals and have the following to report. Manufacturing companies pay at the rate of Rs 40,000 to Rs 60,000 per year of post-qualification experience with stray exceptions for IIM products. Private banks and insurance companies pay their MBAs and CAs closer to the Rs one lakh a year mark, though one must admit that foreign banks pay higher, but their numbers are rather limited. Telecom companies are in the same range as private banks. But IT companies are now breaching the Rs 2-lakh a year mark even for mid-managers with basic skills.
I came across the profile of a thirty-something HR manager of the Indian back office of a foreign insurance company, who has broken the Rs 3-lakh a year barrier and is still aggressively looking for a change. Is he a professional manager or a soldier of fortune? Such individuals need to be on the watch list of the tech industry as they are likely to make up for the lower salary in the next job through unfair means if they don’t get what they covet. It is obvious that there is an acute dearth of talent in the tech industry which is causing this visible disconnect in compensation even as our tech industry leaders continue to exaggerate their claims about India possessing abundant human resources.
Our education system is still primarily government-owned and the ones operated as private initiatives are confined only to a few elite institutions. Therefore, tech companies need necessarily to invest in a pipeline that they have not yet. If they don’t, it would be only at their own peril.
NIIT arm acquires US firm for $40m
Hyderabad, July 27: NIIT Global has entered into a definitive agreement to acquire Element K, a provider of learning solutions in North America, for a reported sum of $40 million. The transaction is expected to close within two weeks. Post-acquistion the comkpany will have more than with more than 3,000 employees, over $ 250 million in revenue and a presence in 32 countries.
“Element K’s $ 80 million learning solutions business leverages its renowned technology Knowledge Hub, and an award-winning suite of more than 3,500 courses. Its learning solutions are enhanced through custom content development and strategic learning services, to address specific business challenges,” an NIIT release said. “This acquisition is consistent with our stated plans for accelerated gr-owth in developed econ-omies,” said Vijay Thadani, CEO of NIIT. “We are very pleased to become part of NIIT’s global learning business,” said Stephen Hoffman, chief executive officer of Element K. Meanwhile, NIIT also announced its net profit at Rs 13.2 crore for the first quarter of FY2007, ended June 30, which led to the Earning Per Share (EPS) of Rs 6.80.
Matrix Labs posts profit of Rs 33.8cr
Hyderabad, July 27: Matrix Laboratories Ltd said on Thursday it posted a consolidated net profit of Rs 33.8 crores on consolidated net sales of Rs 442.2 crores in the first quarter of 2006-07, compared to a net income of Rs 25.3 crores on sales of Rs. 154.3 crores in the corresponding quarter of the previous year, on stand-alone basis.
A Matrix statement said that the company’s R&D expenses had risen to Rs 17.7 crores against the Rs 14.4 crores in the preceding quarter. The generic API business contributed Rs 127 crores to the consolidated net sales for the quarter against Rs 128.7 crores recorded in the preceding quarter.
“The marginal shortfall in sales in this segment is due to less than anticipated off-take of certain key products both in Matrix-India and FCC. During the quarter, the company filed 4 Drug Master Files in the US, taking the total tally to 64. In addition, European DMFs have been filed for thre APIs,” the release said. The company had a successful audit from the US FDA in one of its API manufacturing facilities located in Vishakapatnam, during the first quarter. It said that the consolidated sales in the ARV portfolio was Rs 103 crores, as against the Rs 82.8 crores recorded in the preceding quarter with a growth of 24 per cent.
Docpharma, NV, a 100 per cent subsidiary of the company recorded revenue of euro 28.24 million for the quarter under review, which represents a growth of eight over the previous year (corresponding period euro 26.19 million). “This slow growth is due to delay in receiving regulatory approvals for key products in Belgium, the key market for the company. Docpharma recorded net income of euro 2.2 million for three months ended 30 June 2006.
WB to fund 2 Indian CDM projects
Hyderabad, July 27: The World Bank, as trustee of the Community Development Carbon Fund (CDCF), has signed two agreements with two Indian companies to promote technologies that may help revolutionise the building material industry. The two companies are the Visakhapatnam-based Eco Carbon, promoted by the Institute for Solid Waste Research and Ecological Balance, and Technology and Action for Rural Advancement, the social enterprise arm of the Development Alternatives Group.
Inswareb has developed technology, called FaL-G, which replaces the clay used in the manufacture of bricks with fly ash, generated by thermal power plant. “The World Bank will be providing $4.5 million to promote the adoption of Fal-G technology, and Eco Carbon will be the implementing agency,” Nateri Kalidas, executive director of Eco Carbon said on Thursday. “The initiative will replace environmentally damaging burnt clay building bricks in India’s construction sector with fly ash brick which is manufactured using available industrial wastes/by-products as basic raw materials,” the World Bank said.
Tara will be the implementing agency for a Vertical Shaft Brick Kiln technology project, which aims to improve the thermal performance of the brick manufacturing units in selected clusters of the country, especially in the states of Chattishgarh, Madhya Pradesh, Rajasthan, Orissa, Jharkhand, Uttar Pradesh and West Bengal. “This technology is both cleaner and more energy efficient than the clamp technology, which is commonly used by the small and medium scale brick manufacturers,” the bank said.
Tara intends to set up a total of about 126 VSBK plants, in a time frame of two to three years in selected clusters in the participating states through different entrepreneurs. The almost 400,000 tons of greenhouse gas emission reductions generated by the project over 10 years will be purchased by the CDCF. “These projects will help clean up the brick industry which is not just one of the major contributors to India’s carbon dioxide emissions, but also uses up inordinate amounts of coal energy,” said Michael F. Carter, World Bank country director for India.
ADB okays $300m loan to NTPC
Hyderabad, July 27: The board of the Asian Development Bank on Thursday approved a loan of up to $300 million to NTPC Ltd to finance its power generation capacity expansion programme and to reduce the country’s power shortfall.The loan will be the first time ADB will lend to a majority state-owned enterprise without a government guarantee under the bank’s innovation and efficiency initiative (IEI) through pilot financing instruments, a release from the Manila, Philippines-based bank said.
The loan will help fund capital expenditure for two projects — the Sipat Super Thermal Power Plant in Bilaspur, Chhattisgarh, and the Kahalgaon Super Thermal Power Plant Stage II Project in Bhagalpur, Bihar. Together, these two projects will add 4,480 MW of electricity to the national grid between 2006 and 2009.
“Although India’s power sector has expanded rapidly in the past few years, the country has a large power supply deficit that is constraining economic growth. The government has set an ambitious target of providing power to all by 2012, which would require additional capacity of nearly 100,000 MW by 2012,” the release said. The largest power generator in India, NTPC’s ability to increase power capacity is critical to reducing peak power and energy deficits, which may soon constrain the country’s economic growth targets, said Mr Don Purka, an ADB structured finance specialist in the private sector operations department. “NTPC is a technically and financially sound enterprise with strong cash flows, a model corporate governance reform programme and experienced management,” he said. NTPC will implement, for the first time in India, supercritical steam technology at the Sipat
plant that will operate at higher pressures and temperatures, improving efficiency and reducing fuel consumption and greenhouse gas emissions such as carbon dioxide. “ADB’s loan will be provided in two parts. The first is a loan of $75 million from ADB’s own resources and the second is a loan through ADB’s complementary financing scheme of $225 million to be underwritten and syndicated to commercial lenders. This will be the first time ADB’s CFS product is being used in India,” ADB said.
Hyderabad, July 27: Strong generic drug sales and contributions from recent acquisitions in Germany and Mexico helped Dr Reddy’s Laboratories Ltd post a net profit of $30 million (Rs 139.8 crores) in the first quarter of 2006-07, against the net loss of $5.3 million in the immediate preceding quarter, and the net profit of $8 million (Rs 34.7 crores) in the first quarter of 2006-07. The earnings figures surpassed analysts’ expectations and lifted Dr Reddy’s shares by 3.3 per cent to Rs 1,367.30 in trading on the BSE on Thursday.
Revenues increased by 151 per cent to $306 million (Rs 1,404 crores) from the $122 million (Rs 569.1 crores) in the first quarter of 2005-06. Mr G.V. Prasad, Dr Reddy’s CEO, told reporters that the sale of “authorised” generic versions of Merck’s Zocor and Proscar contributed Rs 334.6 crores.
The company launched simvastatin and finastride, the generics of Zocor and Proscar, in the United States on June 23, after Merck’s patent on the two “innovator” drugs expired. Simvastatin is indicated for lowering cholesterol, while finastride is indicated for the treatment of prostate enlargement.
Mr Prasad, and K. Satish Reddy, managing director and COO of the company, said that the company expects to maintain the first quarter momentum in the sales of the two generics. Merck’s “authorised” generic for Zocor has a 180-day marketing exclusivity. Dr Reddy’s will be manufacturing both generics in Hyderabad after the 180-day period. The company will be sharing its revenue from the two generic drugs with Merck, though Mr Prasad declined to elaborate on the financial arrangement. Exports contributed 83 per cent of Dr Reddy’s revenue in the first quarter, accounting for Rs 1,171 crores of the total sales, while revenues from India rose by 15 per cent to Rs 240 crores.
Mr Prasad said that while sales of the authorised generics, which contributed 24 per cent of revenues, are expected to be good, a decline was to expected after the end of the exclusivity period. Meanwhile, the company is expecting to get approval for an “authorised” generic of ondansetron, whose patent is held by GSK. Ondansetron is used to prevent nausea and vomiting caused by cancer chem-otherapy, radiation therapy, anesthesia, and surgery.
Mr Prasad said Dr Reddy’s acquisitions, of Roche’s API assets in Mexico and betapharm in Germany, contributed 23 per cent of the revenues during the first quarter. According to a company release, Dr Reddy’s investments in R&D had declined four per cent of total revenues against the nine per cent Y-o-Y.
Rising wages do not faze IT workers
The English-language media have always had a bee in their bonnet about the Pay Commissions and hold junior government employees responsible for our Budget deficits and fiscal impropriety. Yet, at the same time, the same reporters celebrate the million-dollar salaries that are now being freely handed out at IIM campuses and also gush over the stratospheric compensation of IT professionals.
If the recommendations of successive Pay Commissions have squeezed our national exchequer, I can say with a strong element of conviction that the grossly-overpaid IT professionals are squeezing the bottom line of our technology industry. Dalal Street has pointedly given a thumbs down to IT companies who continue to molly coddle their employees by paying them more than they deserve. But our IT professionals, many of who are known more for their greed rather than their professional abilities, don’t seem to care as long as they are guaranteed a 20 per cent year-on-year increment when our industrial workers have to make do with a mere pittance.
Friends in the recruiting industry tell me that the bare minimum demand of an IT professional to consider a new job is a 50 per cent escalation in salary. Considering that most of these fickle professionals effect job changes almost every year, they
end up experiencing a five-fold increase in their compensation in four years! Still they remain restless probably realising that this wanton party won’t last too long. Compare this with a mid-manager in a manufacturing company, whose salary probably doubles over a ten-year term.
The digital divide in India is breeding simmering discontent among our non-tech salaried classes which may soon come to the surface unless most of our IT professionals take stock of the damage that they are inflicting to the bottom line of their employers which has the potential of turning India into an economically unviable destination. Steve Jobs read the signals early and cut his losses. This could well pan out into a trend.
SALARY BENCHMARKS
To ascertain the widening gap in salaries between IT workers and those in other industries, I researched about a hundred bio-datas on several job portals and have the following to report. Manufacturing companies pay at the rate of Rs 40,000 to Rs 60,000 per year of post-qualification experience with stray exceptions for IIM products. Private banks and insurance companies pay their MBAs and CAs closer to the Rs one lakh a year mark, though one must admit that foreign banks pay higher, but their numbers are rather limited. Telecom companies are in the same range as private banks. But IT companies are now breaching the Rs 2-lakh a year mark even for mid-managers with basic skills.
I came across the profile of a thirty-something HR manager of the Indian back office of a foreign insurance company, who has broken the Rs 3-lakh a year barrier and is still aggressively looking for a change. Is he a professional manager or a soldier of fortune? Such individuals need to be on the watch list of the tech industry as they are likely to make up for the lower salary in the next job through unfair means if they don’t get what they covet. It is obvious that there is an acute dearth of talent in the tech industry which is causing this visible disconnect in compensation even as our tech industry leaders continue to exaggerate their claims about India possessing abundant human resources.
Our education system is still primarily government-owned and the ones operated as private initiatives are confined only to a few elite institutions. Therefore, tech companies need necessarily to invest in a pipeline that they have not yet. If they don’t, it would be only at their own peril.
NIIT arm acquires US firm for $40m
Hyderabad, July 27: NIIT Global has entered into a definitive agreement to acquire Element K, a provider of learning solutions in North America, for a reported sum of $40 million. The transaction is expected to close within two weeks. Post-acquistion the comkpany will have more than with more than 3,000 employees, over $ 250 million in revenue and a presence in 32 countries.
“Element K’s $ 80 million learning solutions business leverages its renowned technology Knowledge Hub, and an award-winning suite of more than 3,500 courses. Its learning solutions are enhanced through custom content development and strategic learning services, to address specific business challenges,” an NIIT release said. “This acquisition is consistent with our stated plans for accelerated gr-owth in developed econ-omies,” said Vijay Thadani, CEO of NIIT. “We are very pleased to become part of NIIT’s global learning business,” said Stephen Hoffman, chief executive officer of Element K. Meanwhile, NIIT also announced its net profit at Rs 13.2 crore for the first quarter of FY2007, ended June 30, which led to the Earning Per Share (EPS) of Rs 6.80.
Matrix Labs posts profit of Rs 33.8cr
Hyderabad, July 27: Matrix Laboratories Ltd said on Thursday it posted a consolidated net profit of Rs 33.8 crores on consolidated net sales of Rs 442.2 crores in the first quarter of 2006-07, compared to a net income of Rs 25.3 crores on sales of Rs. 154.3 crores in the corresponding quarter of the previous year, on stand-alone basis.
A Matrix statement said that the company’s R&D expenses had risen to Rs 17.7 crores against the Rs 14.4 crores in the preceding quarter. The generic API business contributed Rs 127 crores to the consolidated net sales for the quarter against Rs 128.7 crores recorded in the preceding quarter.
“The marginal shortfall in sales in this segment is due to less than anticipated off-take of certain key products both in Matrix-India and FCC. During the quarter, the company filed 4 Drug Master Files in the US, taking the total tally to 64. In addition, European DMFs have been filed for thre APIs,” the release said. The company had a successful audit from the US FDA in one of its API manufacturing facilities located in Vishakapatnam, during the first quarter. It said that the consolidated sales in the ARV portfolio was Rs 103 crores, as against the Rs 82.8 crores recorded in the preceding quarter with a growth of 24 per cent.
Docpharma, NV, a 100 per cent subsidiary of the company recorded revenue of euro 28.24 million for the quarter under review, which represents a growth of eight over the previous year (corresponding period euro 26.19 million). “This slow growth is due to delay in receiving regulatory approvals for key products in Belgium, the key market for the company. Docpharma recorded net income of euro 2.2 million for three months ended 30 June 2006.
WB to fund 2 Indian CDM projects
Hyderabad, July 27: The World Bank, as trustee of the Community Development Carbon Fund (CDCF), has signed two agreements with two Indian companies to promote technologies that may help revolutionise the building material industry. The two companies are the Visakhapatnam-based Eco Carbon, promoted by the Institute for Solid Waste Research and Ecological Balance, and Technology and Action for Rural Advancement, the social enterprise arm of the Development Alternatives Group.
Inswareb has developed technology, called FaL-G, which replaces the clay used in the manufacture of bricks with fly ash, generated by thermal power plant. “The World Bank will be providing $4.5 million to promote the adoption of Fal-G technology, and Eco Carbon will be the implementing agency,” Nateri Kalidas, executive director of Eco Carbon said on Thursday. “The initiative will replace environmentally damaging burnt clay building bricks in India’s construction sector with fly ash brick which is manufactured using available industrial wastes/by-products as basic raw materials,” the World Bank said.
Tara will be the implementing agency for a Vertical Shaft Brick Kiln technology project, which aims to improve the thermal performance of the brick manufacturing units in selected clusters of the country, especially in the states of Chattishgarh, Madhya Pradesh, Rajasthan, Orissa, Jharkhand, Uttar Pradesh and West Bengal. “This technology is both cleaner and more energy efficient than the clamp technology, which is commonly used by the small and medium scale brick manufacturers,” the bank said.
Tara intends to set up a total of about 126 VSBK plants, in a time frame of two to three years in selected clusters in the participating states through different entrepreneurs. The almost 400,000 tons of greenhouse gas emission reductions generated by the project over 10 years will be purchased by the CDCF. “These projects will help clean up the brick industry which is not just one of the major contributors to India’s carbon dioxide emissions, but also uses up inordinate amounts of coal energy,” said Michael F. Carter, World Bank country director for India.
ADB okays $300m loan to NTPC
Hyderabad, July 27: The board of the Asian Development Bank on Thursday approved a loan of up to $300 million to NTPC Ltd to finance its power generation capacity expansion programme and to reduce the country’s power shortfall.The loan will be the first time ADB will lend to a majority state-owned enterprise without a government guarantee under the bank’s innovation and efficiency initiative (IEI) through pilot financing instruments, a release from the Manila, Philippines-based bank said.
The loan will help fund capital expenditure for two projects — the Sipat Super Thermal Power Plant in Bilaspur, Chhattisgarh, and the Kahalgaon Super Thermal Power Plant Stage II Project in Bhagalpur, Bihar. Together, these two projects will add 4,480 MW of electricity to the national grid between 2006 and 2009.
“Although India’s power sector has expanded rapidly in the past few years, the country has a large power supply deficit that is constraining economic growth. The government has set an ambitious target of providing power to all by 2012, which would require additional capacity of nearly 100,000 MW by 2012,” the release said. The largest power generator in India, NTPC’s ability to increase power capacity is critical to reducing peak power and energy deficits, which may soon constrain the country’s economic growth targets, said Mr Don Purka, an ADB structured finance specialist in the private sector operations department. “NTPC is a technically and financially sound enterprise with strong cash flows, a model corporate governance reform programme and experienced management,” he said. NTPC will implement, for the first time in India, supercritical steam technology at the Sipat
plant that will operate at higher pressures and temperatures, improving efficiency and reducing fuel consumption and greenhouse gas emissions such as carbon dioxide. “ADB’s loan will be provided in two parts. The first is a loan of $75 million from ADB’s own resources and the second is a loan through ADB’s complementary financing scheme of $225 million to be underwritten and syndicated to commercial lenders. This will be the first time ADB’s CFS product is being used in India,” ADB said.
