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Cipla Q3 net up 26% on export growth; Y.K. Hamied to retire as MD

Sales in the quarter were Rs.2,103 crore, up 18% from Rs.1,783 crore a year ago
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First Published: Wed, Feb 06 2013. 06 00 PM IST
The company’s drug formulation exports during the December quarter grew 38% to `969 crore, and the domestic business expanded 10.2% to `957 crore. Photo: Ramesh Pathania/Mint
The company’s drug formulation exports during the December quarter grew 38% to Rs.969 crore, and the domestic business expanded 10.2% to Rs.957 crore. Photo: Ramesh Pathania/Mint
Updated: Wed, Feb 06 2013. 09 59 PM IST
Mumbai: Cipla Ltd, the country’s third-largest drug maker by revenue, said net profit rose 25.5% to Rs.339 crore in the October-December quarter from Rs.270 crore in the year-ago period.
The company said Y.K. Hamied will retire as managing director with effect from 31 March but will continue as chairman.
Sales rose 18% to Rs.2,103 crore from Rs.1,783 crore a year ago on the back of a significant rise in exports. Sales beat market expectations.
Drug formulation exports rose 38% to Rs.969 crore, and the domestic business expanded 10.2% to Rs.957 crore.
An improvement in the operating margin and a 3% saving on material costs helped boost profit.
“Cipla’s revenue was 3.2% above our expectation due to higher-than-expected growth in exports. But domestic growth was disappointing due to the slowdown in the overall domestic market,” said industry analyst Hitesh Mahida of Fortune Equity Brokerage (India) Ltd.
On Wednesday, Cipla shares closed at Rs.404.60, down 0.71% from the previous close on BSE. The benchmark Sensex fell 0.10% to close at 19,639.72 points.
“Cipla’s profit (this quarter) was better than estimated, led by higher formulation export growth and margin expansion by 150 basis points,” said Rikesh Parikh, vice president, market strategy and equities, at brokerage Motilal Oswal Securities Ltd. A basis point is one-hundredth of a percentage point.
“Export formulations seems higher than normal for the company and we believe it is driven by more-than-expected supplies for generic Lexapro to its partner,” added Parikh.
The growth in revenue was primarily due to growth in the sales of anti-depressant, anti-malarial and anti-asthmatic drugs in the quarter, Cipla said in a statement on Wednesday.
The company also attributed growth in the quarter to improved margins due to better product mix aided by contribution from generic Lexapro and anti-allergic drug Dymista.
Cipla had a 180-day market exclusivity for these drugs in the US in the December quarter.
“We believe that increasing capacity utilization at the Indore special economic zone (the company’s new export-oriented unit) has also aided margin expansion on a year- on-year basis,” said Parikh of Motilal Oswal.
(PTI contributed to this story)
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First Published: Wed, Feb 06 2013. 06 00 PM IST
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