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Drug-maker Cipla said its bottomline took a 22 per cent hit for the three months ended March 31, 2011, as a result of a one-time exceptional income of Rs 95 crore in the corresponding quarter last year and increased factory overheads at its Indore Special Economic Zone (SEZ).
However, Cipla's whole-time Director, Mr S. Radhakrishnan, told Business Line that the Indore facility would contribute about 10 per cent of the company's turnover next year – between Rs 400 crore and Rs 600 crore.
This would help break-even the cost. In the year ahead, Cipla looks to grow at a conservative rate of about 12 per cent, he said.
The company's board also took on record the condolence letter sent to the family of Amar Lulla, Cipla's former Chief Executive who died recently, Mr Radhakrishnan added.
On the company's performance, Cipla said its operating margins, as a per cent to income from operations, were lower on a year-on-year basis due to change in product-mix resulting in increase in material cost by 3 per cent and negative contribution of Indore SEZ because of optimisation.
Further, it added, the increase in staff cost at Rs 30 crore was due to increase in manpower — particularly at Indore SEZ — and annual increments. Depreciation had increased by about Rs 20 crore due to additions to fixed assets mainly on account of commissioning of Indore SEZ factory.
repairs and maintenance
Other expenditure has increased mainly due to increase in selling expenses and factory expenditure, in particular at Indore SEZ — such as repairs and maintenance, power and fuel, stores and spares — the company said. The increase in selling expenses was in line with the increase in export turnover, it added.
During the quarter, domestic sales grew by about 15 per cent, at Rs 65 crore in the quarter under review, against Rs 56 crore in the corresponding period last year. Export sales grew by more than 28 per cent, at Rs 97 crore, against Rs 76 crore in the corresponding period last year. Other operating income for the quarter was lower by about Rs 3 crore.
Material cost had increased by about 3 per cent on a year-on-year basis due to changes in product-mix, primarily due to higher proportion of anti-retrovirals in formulation exports, the company said.
For the year ended March 31, Cipla posted a net profit of Rs 967 crore, as compared to Rs 1,081 crore in the previous year. Total income increased from Rs 5,713 crore for the year ended March 31 to Rs 6,397 crore for the year under review.
Cipla shares stood at Rs 303.40, down 1.92 per cent, on the BSE on Thursday.
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