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The weak monsoon is one of the biggest challenges not just for Cipla, but for the industry too, says Cipla Executive Director, Mr S. Radhakrishnan.
And if it does not improve, it could impact the seasonal business of drug companies, in turn affecting the industry’s financial performance this quarter, he added. Other challenges for the company include the power and water challenges, he points out. “We have two factories in Maharashtra and the availability of power and water are a concern,” he said, adding that the company has to work out strategies to stock inventory, or even shift the making of some products to States with a “relatively better” situation such as Himachal Pradesh, Sikkim or Goa.
Q1 review
The drug maker’s income from operations crossed Rs 2,000 crore for the quarter ended June 30, with domestic and international sales contributing equally. Domestic sales grew by more than 30 per cent, on the back of the anti-asthma and antibiotics therapy segments.
Exports grew by 18 per cent, primarily due to growth in anti-depressants and anti-cancer segments, the company said.
Material cost decreased by five per cent due to changes in product mix - lower proportion of anti-retrovirals (AIDS drugs) and higher contribution of anti-depressant segment (Escitalopram), the company said.
As a result, operating margins increased by about five per cent, it added.
The increase in staff cost at Rs 42 crore is due to annual increments and increase in manpower.
Other expenditure has increased by Rs 91 crore for the quarter due to increase in marketing expenses, professional fees and travel expenditure, the company said.
Cipla shares closed at Rs 338 up two per cent on the BSE on Tuesday.
jyothi@thehindu.co.in
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