The Indian counterpart has been in business here for over seventy years. The company is into anti-histamines, cough syrups, anti-emetics and anti-malarials. These segments account for nearly 72 per cent of the turnover. It seems that the strategy of the company is working well and bearing its fruits. After having reduced its large work force in last few years, the company is now again on growth chart not only in sales but also in profits.

The sales for the Q1 ended on 30 June, 2000 grew by 17.11 per cent to Rs 64.86 crore. The company managed to restrict the growth of operating expenditure which increased by 14.97 per cent to Rs 54.68 crore.

The benefit of lower expenditure was reflected in higher operating profits and margins. The operating profit increased by 30 per cent to Rs 12.29 crore and operating profit margins increased by 17 per cent to 19 per cent. The net profit of the company also improved from Rs 5.40 crore to Rs 7.10 crore.The company manufactures mainly Linctus, anti-emetic and anti-nauseant, hypnotics and cough preparations. The company has many leading brands in these therapeutic segments like Phensedyle, Stemtil, Gardenil and Phenergram. About 34 per cent of the turnover comes from these four brands.

Phensedyle alone generates a turnover of Rs 33 crore and is one of the fastest growing brand in the segment. This brand is growing at the rate of 31 per cent per annum. The company has been making efforts to reduce its material cost and has also refurbished its manufacturing facilities. Material cost has reduced substantially during previous year and declined from 55 per cent to 45 per cent only. This has helped the company to increase its operating profit margins.

The company had also acquired the generic business of Max India Ltd about two years ago and has recovered the investment in just two years. The generic drug business is one of the most promising business and offers very large opportunities.

The company has reduced its work force from 1502 to 947 through voluntary retirement scheme. Now the company plans to improve productivity of its field force. With right product mix and proper strategy, the company can reap more profits.For the quarter ended June, 2000 it has posted an EPS of Rs 15.78 as compared to Rs 12 in the previous comparable quarter. For FY 2000 it posted an EPS of Rs 57.56. The equity capital stands at Rs 4.5 crore and the reserves stand at Rs 96.06 crore.

The scrip currently trades at Rs 785. Post the results there has been volume buying on August 3, 2000. The scrip has been languishing at the current level since April.Of late, there has been renewed interest in pharma scrips. Rhone Poulenc has the scope to rise to the level of Rs 1,000 in the immediate future. It could even rise to Rs 1,200 but, that can happen only when a bull run catches on. Once you hold on to the scrip you can even buy more.