Cipla profit falls 34.7% to Rs354.34 crore
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Mumbai: Cipla Ltd reported a consolidated net profit of Rs354.34 crore in the September quarter, down 34.7% from a year ago when it reaped one-off gains.
Net sales of the pharmaceutical company rose 8.7% on year to Rs3,671.89 crore in the quarter on the back of higher growth in the domestic market as well as in the US.
In the year-ago quarter, Cipla reported one-off gains from a pact to supply esomeprazole, used to treat stomach acidity and gastroesophageal reflux disease, to Teva Pharmaceutical Industries Ltd.
The company said the results are not strictly comparable to the year-ago quarter’s. The September quarter’s earnings include revenue from InvaGen Pharmaceuticals, a US-based company that Cipla acquired in February this year, and as last year’s numbers included profit from esomeprazole.
Sales in the Indian market, which accounts for about 40% of Cipla’s total revenue, grew 19% to Rs1,522 crore in the September quarter. Sales in the US increased to $99 million from $74 million a year ago.
Excluding the impact of esomeprazole, the base business in the US registered an increase of 34% in dollar terms, the company said in its earnings presentation.
On a sequential basis, the company’s net profit and net sales were up 4.5% and 3.3%, respectively. Earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 18% in the September quarter as against 17% in the June quarter.
“All our key deliverables measured up in line with the guidance. The performance refects improvement in the quality of the base business, endorsing our strategic intent of investing in the future through increased R&D efforts,” Umang Vohra, managing director and global chief executive officer of Cipla, said.
The company has guided that the EBITDA margin in 2016-17 will be in the range of 16-18%.
“Good results overall. The stock is likely to react positively. The company has done well on the margin front and going forward, the challenge will be to get timely product approvals in the US and Europe,” Meeta Shetty, assistant vice president - research, Kotak Securities, said.
As the company looks to scale up its US business, it expects to file 20-25 abbreviated new drug applications (ANDAs) with the US Food and Drug Administration (US FDA) in the current financial year. It has already filed 12 ANDAs during the first half of the year.