Pricing pressure in the US market coupled with higher selling and administrative costs led to a modest 0.3 per cent improvement in operating margin which stood at 19.7 per cent for the quarter.

However, the company posted 28 per cent revenue growth (Rs 2541 crore) driven by strong performance in India and Russia.

Despite the ramp up in sales of exclusive products such as ziprasidone, clopidogrel, quietiapine IR, the US revenue grew at a slow 10 per cent in dollar terms to Rs 792 crore.

This was due to severe pricing pressure in the existing basket and specific exclusive products, coupled with forex hedging loss on receivables.

However, adjusting for the hedging loss, US revenues grew 24 per cent.

With 4 products filed in the US last quarter, 73 products are currently pending approval.

India formulations grew at a healthy 19 per cent to Rs 348 crore, driven by volume growth across key products, 10 product launches and improved field force productivity.

Russia and CIS grew at an impressive 38 per cent posting revenues of Rs 417 crore.

The 14 per cent revenue growth in Europe (Rs 218 crore) was largely driven by low margin tender-based sales in Germany.

Deferment of launches by customers led to a slow 14 percent growth in the Pharmaceutical services and active ingredients (PSAI) segment’s revenue (Rs 553 crore).

Net profit growth of 13 per cent to Rs 336 crore was largely helped by lower tax outgo (9.8 per cent vis-a-vis effective rate of 18 per cent) on account of unrealised profit on the shipments to the US market.

The management is banking on US launches, pick up in PSAI segment and steady growth India and other emerging markets to achieve its revenue target of USD 2.7 bn (Rs 14850 crore) in FY13.

(This article was published on July 20, 2012)
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