A company press release said that the strong bottomline growth is despite absorption of a fairly high interest cost of Rs 12.95 crore. Operating profit at Rs 28.86 crore, represents a 14.3-per cent increase over that of the previous year.

Lupin Laboratories director (corporate development) Kavita Gupta told The Financial Express that she expects current profitability trends to continue even as sales growth is expected to outpace current levels in the following quarters.

The improved performance, the release said, is the outcome of enhanced internal performance measurement/monitoring systems, focus on core products, control on manufacturing expenses and sales overheads. "Improved margins have also come through enhanced process efficiencies and effective input mix, thereby enabling the company to reduce its overall cost of raw materials by over two per cent," it said. Indications are that a rationalisation of workforce may also be considered in due course.

Lupin Labs chairman and managing director Desh Bandhu Gupta said, "The second quarter of 1999-2000, which generally witnesses dip, is expected to show strong growth as a result of the positive trends during the last few months. The launch of new high-margin products as also focus on core competencies and logical brand extensions will contribute to the overall improved performance, both topline and bottomline in the future. Also investments made during the last year in the expansion of the field force, change in the distribution system are expected to yield better returns in the formulations business of the India region". As a sequel to investment made in the upgradation of plant and equipment and R&D, substantial yield improvements have been achieved in key products such as ethambutol, cefadroxil, cefotaxime and ceftazidime. The company has further strengthened its market position in its key bulk drugs, specifically ethambutol.