Wockhardt has had a roller coaster ride for the past six to seven years. Tracing its trajectory over the past decade, I remembered that till 2006, it used to be like any other pharmaceutical company, doing well both in terms of earnings and stock performance. However, in the pre-Lehman credit bubble, the company entered into some credit derivatives against its FCCB/ECB loans due to bad financial management and landed in CDR, with the stock slipping below ₹100. CDR in India is a blessing in disguise for most borrowers. Wockhardt’s lenders restructured the debt and lowered the interest rate, which gave some relief. In hindsight, it appears that with the promoter (Habil Khorakiwala) not being actively involved in the company’s daily affairs, plus a few leveraged overseas acquisitions and derivative contracts, the company landed in a big financial mess.
The results were visible the moment the promoter became active. The management got rid of its foreign currency convertible bonds, divested non-core businesses like Protinex and focused on regulated markets such as the US and the EU, all of which helped the company turn itself around. Wockhardt manufactures both generic drugs and formulations. Its research-driven and technology-intensive approach has helped it expand its presence in the US and emerging markets. The company has developed brands in a variety of segments, including anti-infectives, pain and inflammation, cough, psychiatry, medical nutrition and biotech. The company also makes recombinant human insulin.
Its revenue pie of around ₹5,000 crore is largely spread across generics, branded generics, APIs, biotec