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A Long And Fruitful Innings
With over two decades of experience in Natco Pharma, Appa Rao knows what it takes to keep the company on top of the charts
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For Svvn Appa Rao, the association with Natco Pharma has been long; an association that has taught him several things. “We like to keep things simple. We believe in identifying products that help in value addition,” says Rao as a matter of fact, in a candid chat with BW Businessworld.
In a career spanning 30 years, Rao has spent about 22 years in the Hyderabad-based company. “It has been a long while. Over two decades to be precise. During this time, we have recalibrated our strategies several times to thrive in the market,” he says. “After all, change is the only constant.”
Rao officially took over as the CFO of Natco Pharma in February 2016. Prior to that, he assumed office as an interim CFO in November 2014 and also served as the company Vice President of Finance & Accounts until February 2016.
For the past few years, Rao has been at the helm of the company, heralding new strategies to strengthen its presence both in the domestic and international market.
For the uninitiated, Natco Pharma is a leading player in India’s oncology segment with 28 active brands. Its flagship brands include Geftinat, Erlonat, Veenat and Sorafenat. The company has also heralded a new beginning in the gastro-hepatology therapy segment. In 2017, it forayed into a new therapy segment by launching a Cardiology and Diabetology (CnD) division.
“Our motto is simple. Before launching a product, we study its sustainability in the long run. That ensures our success,” says Rao . Fiscal year 2016-17 has been particularly noteworthy for the company. In this period, Natco Pharma recorded a 91 per cent growth in revenue over the previous fiscal. What’s more, the company’s profit after tax during the said period grew a whopping 209 per cent and Ebitda 147 per cent. “We had a good run in 2016,” says Rao. During the year, Natco Pharma became the first player to launch the generic version of Oseltamivir, a viral flu medicine, in the US market. In the domestic market, on the other hand, its oncology and hepatitis C portfolio products gained further strength.
Talking about corporate strategies, Rao says: “We keep our debt as low as possible.” Pharma is an industry where the gestation period is rather high. One has to tread carefully in this sector as the regulatory landscape, competition, channel consolidations, emerging patient needs and technological breakthroughs drive industry players to think afresh.
While Natco Pharma invests significantly in R&D facilities, most of the expansion plans are funded through the equity route and internal accruals. In 2017, the company raised Rs 915 crore through issue of securities to qualified institutional investors. Prior to that, in 2015, it raised another round of funds to the tune of RS 340 crore through a similar route.