Mumbai: Exchange-rate fluctuations that raised the cost of servicing foreign debt pushed down net profit at drug maker Piramal Healthcare Ltd by 13% to Rs73.39 crore in the July-September quarter from a year earlier.
Tough times: Piramal Healthcare chairman Ajay Piramal. Abhijit Bhatlekar/Mint
The company’s total income increased 17% during the period.
“The results, excluding the foreign exchange loss, was impressive and there was a 26% increase in domestic sales,” chairman Ajay Piramal said
A finance cost of Rs40.8 crore, clubbed with a voluntary retirement scheme offered to employees that cost Rs9 crore, caused the fall in profit. The rupee has declined about 20% against the dollar this year, making it more expensive to service foreign debt.
According to a sector analyst with a foreign brokerage firm who declined to be identified, the company’s Rs300 crore foreign debt is still a cause for concern.
Piramal’s share price dropped 7.87% to close at Rs219.6 on Bombay Stock Exchange on Wednesday, the day the exchange’s health care index fell 3.16%.
The company, which spun off its research and development unit as a separate entity named Piramal Lifesciences Ltd, had plans to divest a minority stake in the new firm. But, according to Piramal, the deal has been put on hold for some time in view of the adverse stock market situation.