New Delhi: Drug maker Ranbaxy Laboratories Ltd beat analyst expectations to log a 1.1% rise in its net profit to Rs187.8 crore for the December quarter, riding on increased sales in European and emerging markets. The quarter, the last one in the Gurgaon firm’s financial year, helped the company post profits of Rs790.1 crore in 2007, a rise of 53% over the previous year.
Looking ahead: Ranbaxy managing director Malvinder Singh.
Its consolidated revenues for the October-December quarter was Rs1,771.8 crore, up nearly a fifth from Rs1,707.7 crore in the same quarter of 2006. Set to regain its position as the largest Indian drug maker by sales—by April, when all other drug makers would have also announced full year results— Ranbaxy reported sales of Rs6,635.3 crore in 2007, up 9%.
A Mint poll of five equity analyst firms had predicted a 7.38% increase in revenues and over 11% decline in profit after tax in the December quarter. The forecast was made based on strong business growth in 2006 when revenues jumped 17% and profits nearly doubled on one-time gains from sales in the US.
Ranbaxy predicted an 18-20% expansion of revenues in 2008 and a 20-25% growth in net profits. Ranbaxy’s managing director Malvinder M. Singh indicated another patent settlement was likely in a week. He declined to identify the therapeutic category of the drug or its name, only saying that it had revenues in excess of $1 billion or Rs3,930 crore.
Still, shares of Ranbaxy fell 2.85% to close at Rs367.90 on a day the benchmark index of the Bombay Stock Exchange, down 0.84%.
The structure of its proposed research unit, Ranbaxy Life Sciences Research Ltd, to be created by spinning off the division, will be announced early February.
In 2007, the drug maker’s North American sales increased by a mere 6% to Rs1,625.14 crore while those in the European Union—largely due to markets of Germany, France and UK—rose 24% to Rs1,421.51 crore. Revenues in India grew 11% to Rs1,178.72 crore. Nimish Mehta, head of India research at MP Advisors Pvt. Ltd, the Indian unit of a New York analysis and asset management firm, said he was concerned about Ranbaxy’s inability to keep pace with growth in the domestic market and the possibility of further rupee appreciation.