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Elder Pharmaceuticals hopes to do a Shelcal with its nutraceutical brand Eldervit, the company has said, laying out its expansion plans.
It was about six months ago that Elder sold its branded drugs business in India and Nepal to Gujarat’s Torrent Pharmaceuticals for Rs 2,000 crore. And 30 brands from the Elder stable, including flagship product Shelcal, moved to Torrent. The popular brand Shelcal reportedly had sales of over Rs 170 crore.
With this deal now sealed, Elder Pharma top brass say they want to create a super brand out of Eldervit by extending the brand to other products, besides expanding its reach to a larger market. Estimated to be a Rs 40-crore brand, Eldervit is a prescription drug that acts as an energy booster by combining the benefits of vitamins and minerals.
“In addition to injection form, we are making Eldervit available in the capsule, gel capsule and sachet form to make it acceptable to all age groups. With its new range and aggressive national expansion, Elder hopes to add a million customers every month and make Eldervit a Rs 100-crore brand by the end of financial year 2016 and a Rs 300-crore brand by FY 2019,” said Alok Saxena, Elder Pharma’s Managing Director.
The company is also looking to grow another nutritional product, Thrive. A natural supplement that helps fight chronic metabolic disorders, Thrive is likely to generate revenues of about Rs 10 crore this financial year, the company said, at an anticipated growth rate of 12-15 per cent. Product extensions of Thrive too have been launched in drink, capsule and tablet form, it added.
Last December, when the sale was announced, Elder had a debt of about Rs 1,300 crore.
Restructuring
In the business remaining with Elder after the sale, the company is restructuring its team and rationalising prices to up volumes in the anti-infectives market, the company said. Anti-infectives such as Cefixime-based Formic and Elfi have been registering a growth of more than 12 per cent annually, the company added. Other focus areas for the company include segments such as lifestyle diseases, dermatology and neurological segments. Anti-infectives contribute about 10 per cent to the company’s revenues.
Elder’s international operations are also growing steadily, the company said, adding that it expected over 40 per cent of the company’s revenue to come from its global business. Elder Pharma had acquired UK-based Max Healthcare for an undisclosed sum, marking its entry into the over-the-counter business. It also has NeutraHealth, a fully-owned subsidiary in the UK, besides majority stake in Ghana’s Wincom Formulations and Bulgaria’s Biomeda OOD Ltd.
Contract manufacture
The Torrent deal also involved the transfer of Elder’s domestic business employees to the former. For three years though, Elder will continue to contract manufacture medicines for the segments sold to Torrent, at Elder’s six plants. This would bring into Elder’s kitty about Rs 70-75 crore every year, the company said. Elder group is targeting a turnover of about Rs 1,000 crore from its domestic and international operations by FY 2016, the company added.
Elder shares were up close to 3 per cent on the BSE at noon, at Rs 201 on Friday.
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