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Glenmark Life Sciences says margin could move up if input prices don’t play hovoc

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In an interview with CNBC-TV18, Yasir Rawjee, Managing Director & Chief Executive Officer, Glenmark Life Sciences, said that margin has been under pressure due to the rising input costs. He expects it will be maintained at 28-29 percent. Going ahead, if things improve on the raw material cost front, margin could move up  to 30-31 percent, he shared.

Glenmark posted its fourth quarterly earnings. The company reported weak margins on account of low COVID-related sales, and higher input costs. The company's net profit saw a dip of around 5 percent on a year-on-year basis.
In an interview with CNBC-TV18, Yasir Rawjee, Managing Director and Chief Executive Officer, Glenmark Life Sciences, said that margin has been under pressure due to the rising input costs. He expects it will be maintained in the range of 28-29 percent. Going ahead, if things improve on the raw material cost front, margin could move up  to 30-31 percent, he shared.
"Certainly, margins have been under pressure on account of input costs. As far as the outlook going forward, we expect that the situation is not going to worsen. So we will be able to maintain margins around the 28-29 percent levels. And if things improve, then our margins would go back up to 30-31 percent that we have historically been delivering to the shareholders," he said.
On being asked if he is seeing any price hikes in raw materials on account of China’s lockdowns, he said that he isn’t. He explained that he has options to procure materials from other geographies.
"Currently, we are not seeing price hikes on account of raw materials from China but there's certainly a possibility of delays if these port shutdowns continue and that could impact serviceability some in Q2, we've already covered for Q1. So that's not going to be a challenge at all. Our growth would be between 12 percent and 14 percent. We don't want to change our guidance, because we have other options in order to get materials either from outside of China from India and some from Europe," he added.
On Molnupiravir, he said that he won’t be venturing into it. "We have decided not to get into Molnupiravir and I think it was a good decision, because the demand wasn't there in the market."
On Paxlovid, he said that he is in a position to supply it in case demand picks up. "For Paxlovid, there is significant interest and we have started developing the molecule. So if a demand picks up, then we would be in a position to supply Paxlovid in the future."
For full interview, watch the accompanying video.
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