Habil Khorakiwala, 70, chairman of generic drugmaker Wockhardt, says that the company's near-death experience has taught him lessons that he hopes will last generations.
"We have decided not to touch derivative instruments. Some bankers still come to us with such products. I tell them, I don't want to risk my organisation in my lifetime or in my children's lifetime," says the septuagenarian chairman, much chastened after foreign exchange losses three years ago that almost drove his company into bankruptcy.
As a result pharma multinationals were hovering around for easy pickings, hoping to scoop up a firm that happens to be one of the fastest growing generic drug makers in India.
In April 2008, Khorakiwala, who founded Wockhardt in the early sixties, the company was then known as Worli Chemical Works, announced its first ever loss, due to a mark to market loss of Rs 581 crore on account of the huge devaluation of the rupee even as in the same year sales grew 35% to Rs 3,593 crore.
On Friday, when ET met him, a day after he completed a Rs 1,280-crore deal with Danone for Wockhardt's nutrition business, a confident Khorakiwala spoke candidly of his past troubles which are now behind him. Over the last two years, Wockhardt's debt-equity ratio has come down significantly from a high of 5.5:1 to 1.9:1, which will be below 1 after the money comes in from Danone.
The stock has seen an exponential rise, jumping almost 200% in the last one year a sign, analysts say, investors have started re-rating the company.
Acknowledging the role of his immediate family and his top management team for standing by him as he struggled to steer the company back into profitability, Khorakhiwala is certain that the turnaround is complete as a series of sales of non-core assets that included hospitals and the nutrition business helped pare debt even as core operations improved.
Generics, the core business, has consistently delivered, even during its troubled years post 2008.
Its Ebitda margins over last three years have thus showed a consistent rise. In 2011-12, it was about 31%, while in the previous year it was 24%. In 2009-10, it was 18%.
Wockhardt has about 70% of its sales accruing from overseas, mostly the US. Hedging is par for the course for companies with forex exposure. TCS, Infosys hedge as a matter of routine.
"We deliberated. We have a large portion of our business coming from overseas. It is neutral for us and we are not managing currencies. You burn your hands once then it takes time to recover," he says. A business runs on its inner core and inner strength, he says and for Wockhardt the only challenge was the "financial challenge", and therefore could be resolved.
"We never had a business challenge. We remained very focused," Khorakiwala said.
"We have decided not to touch derivative instruments. Some bankers still come to us with such products. I tell them, I don't want to risk my organisation in my lifetime or in my children's lifetime," says the septuagenarian chairman, much chastened after foreign exchange losses three years ago that almost drove his company into bankruptcy.
As a result pharma multinationals were hovering around for easy pickings, hoping to scoop up a firm that happens to be one of the fastest growing generic drug makers in India.
In April 2008, Khorakiwala, who founded Wockhardt in the early sixties, the company was then known as Worli Chemical Works, announced its first ever loss, due to a mark to market loss of Rs 581 crore on account of the huge devaluation of the rupee even as in the same year sales grew 35% to Rs 3,593 crore.
On Friday, when ET met him, a day after he completed a Rs 1,280-crore deal with Danone for Wockhardt's nutrition business, a confident Khorakiwala spoke candidly of his past troubles which are now behind him. Over the last two years, Wockhardt's debt-equity ratio has come down significantly from a high of 5.5:1 to 1.9:1, which will be below 1 after the money comes in from Danone.
The stock has seen an exponential rise, jumping almost 200% in the last one year a sign, analysts say, investors have started re-rating the company.
Acknowledging the role of his immediate family and his top management team for standing by him as he struggled to steer the company back into profitability, Khorakhiwala is certain that the turnaround is complete as a series of sales of non-core assets that included hospitals and the nutrition business helped pare debt even as core operations improved.
Generics, the core business, has consistently delivered, even during its troubled years post 2008.
Its Ebitda margins over last three years have thus showed a consistent rise. In 2011-12, it was about 31%, while in the previous year it was 24%. In 2009-10, it was 18%.
Wockhardt has about 70% of its sales accruing from overseas, mostly the US. Hedging is par for the course for companies with forex exposure. TCS, Infosys hedge as a matter of routine.
"We deliberated. We have a large portion of our business coming from overseas. It is neutral for us and we are not managing currencies. You burn your hands once then it takes time to recover," he says. A business runs on its inner core and inner strength, he says and for Wockhardt the only challenge was the "financial challenge", and therefore could be resolved.
"We never had a business challenge. We remained very focused," Khorakiwala said.
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