Regaining Lost Health

In the heady days of 2005-2007, Wockhardt followed what every big Indian corporate did – shop for companies around the world. The company picked up a number of companies in the US and Europe between 2006 and 2007, spending nearly $500 million, which was mostly funded through debt. The decision to leverage and fund the acquisitions through debt started to haunt the company later and threaten its very survival. The story of Wockhardt is not that it went into corporate debt restructuring (CDR). Many companies go into CDR every year, some count out of it successfully, while some are closed down. Wockhardt's story is different and it is a different entity compared to what it was in 2009-10. Salvaging its strengths, the company has kept its sinking boat afloat, and is even cruising well. Its core operations in the US is doing well and margins are next only to the industry leader Sun Pharma. Wockhardt it appears still has a second chance to get fighting fit once again. Strengths It would not be wrong to attribute the turn in fortunes to the US operations. The US business saw revenues nearly treble from $148 million in CY08 to $400 million in FY12. This growth has been largely driven on the success of drugs such as Metoprolol Succinate (Toprol XL), Bromfed DM, Nystatin, Azithromycin, Lisinopril and Tamsulosin among others. Wockhardt ranks among the top-5 Indian pharma companies by revenues in the US today, largely due to the success of these drugs. The US operations now bring 48 per cent of Wockhardt's total sales and is expected to grow by 21 pe

This article was originally published on January 22, 2013.