BackBiocon Q2 profit declines 54% on rupee volatility
Biocon Q2 profit declines 54% on rupee volatility
PremiumFalling down: Biocon’s Kiran Mazumdar-Shaw.?The firm was forced to make a mark-to-market provision of Rs60 crore this quarter. Hemant Mishra / Mint
Bangalore: Biotechnology company Biocon Ltd said on Thursday its consolidated net profit (including that of its units) declined 54 % in the second quarter because of the weakening rupee. Net profit for the three months ended September fell to Rs25.02 crore against Rs53.97 crore in the same period last year.
“At a time when global businesses are challenged with an economic downturn, we believe that our strong financial base gives us a significant advantage," said Kiran Mazumdar-Shaw, chairman and managing director of Biocon, who attributed the reduction in profit to rupee volatility which forced the firm to make a mark to market provision of Rs60 crore this quarter. “We’ve also made a policy correction so that we operate within a protection band and reduce our quarterly dollar exposure," she said.
Analysts say the overall numbers are in line with expectation except for the contract research segment, which largely comprises Syngene International Ltd. And though Syngene registered 21% quarter on quarter growth, they believe it has “fallen off" the profitability curve.
Biocon, which will turn 30 in November, is particularly optimistic about its retail health care business which grew 36% this quarter. It also expects licensing income, merely Rs3 crore this quarter, to grow significantly by the end of the fiscal. Biocon’s shares ended 3.27% down at Rs125.9 on the Bombay Stock Exchange.
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