Mumbai: Domestic drug maker Cipla Ltd posted a low growth in net profit at Rs190.6 crore, despite a 25% growth in sales during the quarter ended 30 September, largely due to a significant rise in expenditure coupled with impacted earnings because of the appreciating rupee.
The company, which is the largest player in the domestic pharmaceutical market by sales, had total sales of Rs1,140 crore during the quarter, compared with Rs915 crore in the year-ago period. Net profit during the quarter grew only by 5.5%, against Rs180 crore in the second quarter last year. “There was high marketing expenditure during this quarter following launches of a couple of over-the-counter products in the local market,” Cipla’s managing director Amar Lulla said. “This was one of the factors which affected the profitability.”
Cipla shares closed on Wednesday at Rs196.60—up 1.71% on the Bombay Stock Exchange. The company’s expenditure during the quarter increased 30%, at Rs874 crore, as compared with Rs668 crore in the year-ago quarter. “Since the company’s profitability currently depends on export revenue to a great extent, the rupee appreciation has affected profit,” said a pharmacy analyst, who did not want to be named. “The overall outlook seems to be promising as it has a number of products in the pipeline for the anti-AIDS and anti-asthma markets.”