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Expect margin to be lower by 2-3% due to pressure on raw material: Glenmark Life Sciences

One fallout of the Russia-Ukraine crisis has been higher solvent prices for API manufacturers. Solvents whose feedstock is crude and gas have been on an up move in the past six to nine months. This was due to the coal linked energy crisis and supply chain disruptions. CNBC-TV18 spoke to Yasir Rawjee, MD and CEO of Glenmark Life Sciences to understand Ukraine-Russia war impact on business and supply chain.

By Ekta Batra | Sonia Shenoy Mar 15, 2022 2:21:15 PM IST (Published)

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One fallout of the Russia-Ukraine crisis has been higher solvent prices for API manufacturers. Solvents whose feedstock is crude and gas have been on an up move in the past six to nine months. This was due to the coal linked energy crisis and supply chain disruptions. The prices are now on an upward curve again due to the impact of the Russia-Ukraine crisis on crude and gas prices.

Speaking to CNBC-TV18, Yasir Rawjee, MD and CEO of Glenmark Life Sciences said, “Our EBITDA margin that we have been constantly achieving 30 to 31 percent is down to around 28.6 percent. Now, that is the net effect because we have been passing some cost increases to some of our customers, we are not able to do it for every API, because even customers are facing challenges in the US market.”

He added, “Gas has been going up very significantly. We were at Rs 35 back in July, which went up to Rs 65 in January, and then suddenly in March with all this global events happening we are going to get hit by Rs 150 plus, in terms of gas prices, and this impacts our energy, with respect to steam generation, and so on.”

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