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Amrutanjan heads for US, Europe

Amrutanjan Healthcare, the Chennai-based, 117-year-old pain management products company, is planning to expand to the US and European markets.

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Amrutanjan Healthcare, the Chennai-based, 117-year-old pain management products company, is planning to expand to the US and European markets.

“We are evaluating an option of having a base in Poland to cater to the European market. The plan for the US market is still at an early stage. Since we are looking at the over-the-counter market in the US that too with our popular product line, there should not be much of a problem. We don’t have to file NDAs (new drug applications) with the US FDA except for providing details of the ingredients and complying with the good manufacturing practices norms as laid out by the FDA,” Sambhu Prasad, Amrutanjan’s managing director, told DNA.

The company is also planning to make forays into other overseas markets including the Middle East and East Africa. Though the company is over a century old, it has been more popular in South India with its yellow pain balm. The listed entity is also known to be cautious while pursuing its growth plans.

For the year ended March 2011, Amrutanjan recorded revenues of Rs103.41 crore and a profit of Rs9.46 crore. For the first quarter ended June 2011, the company’s revenue stood at about Rs14.66 crore as against Rs34.34 crore in the quarter ended March 2011. The company’s critics also say that the lack of risk appetite is keeping the growth limited in terms of geographical expansion and the topline expansion.

“It is not true that there is no risk appetite. But we have a focused risk appetite. The first quarter revenue looks lower sequentially. However, we had about `6 crore in the previous year’s first quarter, and year-on-year there is significant growth. We are also venturing into other sectors including hygiene products. We have launched sanitary napkins in the market. We have acquired a company (Siva’s) to launch fruit drinks branded Fruitnik. There are plans for growth,” Prasad, who took over the reins of the company from his father five year back, said.

More importantly, the company is now focusing on makeover to cater to the younger generation. According to Prasad, the yellow balm and brand Amrutanjan are more popular with older generations.

“Many loyal users of our products including the yellow balm may not be there in the next 10 to 20 years. So we need to keep the product current even with the younger generations and the focus is on the brand makeover,” he said.

While the pain management market in India is valued at about `1,600 crore, the balms in bottles find a market of about `600 crore while the rest of the market is with various other products including sprays. Vicks and Zandu Balm lead the market with 16% and 12% market share while Amrutanjan claims a share of about 10%.

Interestingly, the company has a low equity base at about Rs3.03 crore. Though there is a market speculation on the company turning out to be a potential buyout candidate, Prasad has denied any plans to either involve a strategic financial partner or selling the company. However, the market has in recent times witnessed swift activity through bulk deals.

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