The Hindu Business Line : Ranbaxy net rises seven-fold

MR MALVINDER MOHAN SINGH (right), CEO and Managing Director, Ranbaxy Laboratories Ltd, and Mr Ramesh L. Adige, Executive Director, on their way to address a press conference at Gurgaon in Haryana on Thursday. — Kamal Narang

New Delhi , Oct. 19

Ranbaxy Laboratories Ltd announced a 651 per cent jump in net profit for the quarter ended September 30 at Rs 140.4 crore compared with Rs 18.7 crore during the corresponding quarter last fiscal. The company's consolidated sales during the quarter were up 26 per cent at Rs 1,640.4 crore against Rs 1,303.9 crore during the corresponding three-month period last fiscal.

Commenting on the results, the company CEO and Managing Director, Mr Malvinder Mohan Singh, said: "This can be attributed in large measures to the growth being driven in some key geographies and efficiencies gained from sustained cost containment measures."

The board approved the payment of an interim dividend of 50 per cent at Rs 2.50 per share of par value Rs 5 each for the year ending December 2006.

Stock slides

The Ranbaxy stock, however, slid over three per cent to end at Rs 411 per share on the BSE, its biggest fall in five weeks.

During the quarter, the company recorded 38 per cent increase in sales in the emerging markets of Brazil, Russia, China, and India at $139 million (around Rs 611.6 crore). In the US, the world's largest pharma market, the company's sales was up 25 per cent at $96 million (around Rs 422.4 crore) during the quarter. Much of this was on account of a "dominant market share" and "significant revenues" from the `Simvastatin' drug, which enjoyed a prescription share of over 50 per cent buoyed by a 180-day marketing exclusivity.

Sales in the European market were up around one per cent at $49 million (around Rs 215.6 crore) during the quarter, even as key markets of UK, France and Germany sawa slide in sales of 11 per cent over the corresponding period of the previous year.

During the quarter, the company filed nine abbreviated new drug applications (ANDA) in the US with three approvals.

And the company expects to file another 14-15 ANDAs in the remaining period of the year.

3 mergers & acquisitions

The company announced three mergers and acquisitions this quarter including buying out the Glaxosmithkline's Mundogen generic drug unit in Spain, acquiring Gwalior-based Cardinal Drugs and picking up a strategic equity in Hyderabad-based Zenotech Laboratories. Mr Singh added that the company made significant investments, doubling field force in the Romanian pharmaceutical firm Terapia, which it acquired in March 2006. Ranbaxy expects to see good growth next year in Europe, particularly in France and Germany, which have been weak markets for it.

The company expects to maximise its opportunities with Romania joining EU in January 2007. "We are maximising our opportunities as we move forward with Terapia," he added.

Handling Margin pressure

Responding to a query on margin pressure faced by the company in the US market following a nearly 70 per cent price erosion in case of Simvastatin, Mr Singh said the company hoped to address margin pressures in its largest market by expanding customer base and increasing number of products.

With 62 filings pending with the USFDA (19 of which are First-to-file), Ranbaxy expects to launch 70 to 75 per cent of these drugs in the next two years.

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