The reduction in profits is partly due to a "trading policy correction" in the domestic formulations market in the second half of the accounting year and the conscious control of exports to CIS countries and China. Besides, the year also saw an increase in costs due to an expansion of the field force.

Lupin's subdued performance comes even as the company has initiated a major restructuring exercise aimed at "leveraging the company's intrinsic strengths". The revamp would, according to Lupin chairman and managing director, Desh Bandhu Gupta, involve addressing products, markets and people issues and is aimed at improving organisational efficiencies to meet thegoals of today and tomorrow.

Top international consultants including Mckinsey and Boston Consulting Group, among others, have already made presentations to the Lupin top brass and Gupta said a final decision on this would be made in September.

The proposed revamp will, broadly speaking, involve -- higher thrust on markets like the US, Canada, Brazil, Europe, besides the domestic market; working on a full-fledged strategy to globalise Lupin's strong anti-TB portfolio (including new dosage regimens); and a greater thrust in the area of cephalosporins and cardiovasculars.

Lupin's attempt to emerge as a global force in cephalosporins stems from tha fact that this segment constitutes a very large group in the antibiotics category. The global market for cephalosporins is valued at around US $ 10 billion and the Lupin top brass believes that the company's greatest growth in the coming years will be based on the strengths developed in this product group.

INSIGHT:

Lupin Chemicals net up14.27%

Lupin Chemicals has registered a 14.27 per cent increase in net profit for the year ended July 31, 1999, at Rs 12.49 crore as against Rs 10.93 crore in the previous year. Sales rose marginally to Rs 110.38 crore from Rs 109.21 crore in the previous year.

The board has maintained dividend at 10 per cent for the year 1998-99. The company said that the reduction in the notified price of rifampicin to Rs 4,885 per kg from Rs 5,220 per kg had impacted the profitability of the company.