Chennai: Drug-maker Orchid Chemicals and Pharmaceuticals Ltd, on Monday posted a 66.5% drop in standalone net profit at Rs 20.55 crore for the quarter ended March 2012 compared to Rs 61.29 crore a year ago, as pressure on margins, weak rupee and higher interest rates rattled their highly leveraged balance sheet.
Net sales for the company also missed the mark by 8.8% managing to register Rs 451.91 crore versus the year ago in the same fourth quarter, where it posted Rs 495.70 crore.
The company’s profit fell well below analyst expectations for the fourth quarter ended March 31, as a Bloomberg Poll had projected a standalone net profit of Rs 66 crore. Revenues also fell short of the expected Rs 615 crore.
K Raghavendra Rao
Shares of Orchid Pharma took a beating toward the end of trading and were down 13.24% over the previous close at Rs. 139.25 on BSE on Monday, while the benchmark Sensex fell 0.47%.
“The results are not in-line with our estimates. The company was expecting a better off take of high margin products from their partners abroad, which never materialised. This combined with the delay in receiving approvals for certain drugs led to muted sales figures this quarter,” said Subrata Sarkar, research analyst at brokerage firm Dalmia Securities Pvt. Ltd. “The company had earlier laid out a 15% growth rate in sale, but they have managed only 6%, which is disappointing.”
One of the reasons for the sales drop is the closure of their active pharmaceutical ingredients (APIs) making facility in Tamil Nadu, which was shut throughout July, following a notice from Tamil Nadu pollution control board in relation to the disposal of solid waste systems.
The Chennai-based pharmaceutical company’s consolidated net sales rose 7.1% to Rs 1,838.98 crore for the financial year 2011-12 as against last year’s figure of Rs 1,716.98 crore. Consolidated net profit for the year stood at Rs 97.47 crore, a 37.5% dip from the year ago figure of Rs156.18 crore.
The company also redeemed foreign currency convertible bonds worth $ 167.64 million (Rs.824.08 Crores) in February by raising external commercial borrowing debt.
“Despite a few setbacks during the year like the API plant closure, higher interest costs, the weakening rupee which impacted the FCCB redemption and the fire accident at the R&D centre, it is satisfying that we are on a growth path and are confident of delivering value going forward,” said K Raghavendra Rao, chairman & managing director, Orchid Chemicals & Pharmaceuticals Ltd.
Filings in the United States for ANDA (Abbreviated New Drug Application) stood at 43 at the end of FY12, while 29 have been approved at the end of the year. Generic drug approvals will help Orchid manufacture and market the drug product in the US.
Earnings per share after extraordinary items stood at Rs 13.84 for FY12, whereas a year ago it was Rs 22.17.