Mumbai: Drug maker Piramal Healthcare Ltd posted a net profit of Rs 52.9 crore on net sales of Rs 534.7 crore for the three months ended 30 September.
Net profit dropped by 41% compared with Rs 90 crore in the preceding quarter, while net sales rose by 4.3%.
The result is not comparable with the year-ago period as promoters sold their domestic formulations business, which contributed about half the company’s revenue until last year, to US-based Abbott Laboratories Ltd in September 2010.
Piramal Healthcare chairman Ajay Piramal. File photo.
“The profit is largely led by forex gain,” said an analyst who did not want to be identified.
The manufacturer of over-the-counter drugs cannot justify fixed costs for core operations, particularly after selling its domestic formulations business, the analyst said. “The merging of R&D (research and development) into the business would further drive down profitability in subsequent quarters.”
Nandini Piramal, executive director of Piramal Healthcare and daughter of promoter Ajay Piramal, said the company had spent a lot on advertising in the first quarter.
“So we’re expecting increased consumer pull for our brand... We’ve also spent a lot in distribution and beefing up our organization,” Nandini Piramal said.
“We have invested quite heavily in these brands to make them stronger,” said Kedar Rajadnye, president and chief operating officer of the company’s products division.
“The idea is now to extend the benefits of the brand to reach out to a larger consumer base, through extensions. We are looking at leveraging the equity of brands to reach out to more consumers.”
Nandini Piramal said the company is also willing to make acquisitions.
“We’re interested in buying both brands and companies, but again at a valuation where we can make our money back,” she said.
“We are looking at strong brands that have a good distribution reach and that have a good consumer pull.”