Piramal aims to grow OTC business fivefold in 3 years

Piramal Healthcare is looking to grow its over-the-counter (OTC) business over fivefold in the next three years.

The company’s OTC business is expected to touch Rs1,000 crore by 2014-15 from the current Rs160 crore, Nandini Piramal, executive director, Piramal Healthcare, said.

“The consumer spending on OTC is increasing. On the other hand, there is under penetration of OTC. We feel there is tremendous scope for rapid growth,” Piramal said.

The growth will be achieved through organic and inorganic routes.

“We will be launching more products in the wellness category. We are always looking for acquisitions to grow this business. An acquisition will happen if it makes financial sense and complements our existing product profile,” Piramal said.

Piramal’s OTC products include emergency contraceptive I-pill, skin cream Lactocalamine and pain-reliever Saridonis.

Piramal had acquired Cipla’s I-pill for Rs95 crore in March 2010.
According to various industry estimates, India’s OTC segment is pegged at about Rs8,500 crore, growing at 12-15% annually.
In a bid to increase presence, especially rural and semi-urban regions, players such as Ranbaxy, Sanofi Aventis and Novartis have introduced initiatives like Viraat, Prayas, Arogya Parivar, respectively.

The pharma majors have launched branded and patented products and increased the sales network to cover more and more physicians.

However, Piramal said the firm currently has no plans of launching specific initiatives to tap different regions.

“We feel there is still a lot to be covered in the urban markets,” Piramal said.

Ajit Mahadevan, partner-business advisory services, Ernst &Young, said for growth in the OTC segment, branding is very important, along with the reach and availability of the products.

“Since MNCs are aggressive on this front, local firms will face severe competition,” Mahadevan said.

Post sell-out of its domestic formulations business to US-based Abbott Laboratories for Rs17,000 crore, Piramal’s business now primarily consists of contract research and manufacturing services (Crams), OTC, and critical care.

Crams business is valued at about Rs900 crore.

Piramal said post the recession impact, Crams is again slowly picking up and clients are back.