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Profitable product mix, sustainable cost measures led to improvement in margin, says RPG Life Sciences MD

Updated : January 27, 2021 03:45 PM IST

RPG Life Sciences in its Q3 earnings saw a 400-basis points improvement in its margins. EBITDA for the company now stands at 19.8 percent.

Yugal Sikri, MD of the company, said that profitable product mix and sustainable cost measures led to the improvement in margin.

“The margin improvement is pretty significant; around 62 percent growth in EBITDA. The factors which have led to this margin improvement, one is profitable product mix, second is sustainable cost control measures which we introduced last year, third is the sales hygiene, and fourth is the efficiency in manufacturing operations,” he said in an interview to CNBC-TV18.

“The topline is largely driven by all the segments we operate in which is domestic formulations, API, international formulation. There was product portfolio expansion, there was customer coverage expansion both in the international as well as domestic business. That led to topline increase and that also contributed to margin expansion,” he added.

Sikri said that the acute portfolio suffered during COVID-19, but the focus on immunosuppressant helped grow the international formulations.

“In the domestic formulation business, despite the fact that we have acute portfolio dominated business which suffered more negative during the pandemic, our growth has moved to positive territory in the first half. In terms of the international formulations, we had launched a new product – complex generic product, plus the focus on immunosuppressant basket helped us grow in the international formulations business. The API business also performed well. All of them put together contributed to the improvement in business,” he said.

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