New Delhi: India’s largest drug maker by revenue, Ranbaxy Laboratories Ltd, announced record revenue of $1 billion (Rs4,690 crore) in the first half of the year on Thursday—and its chief executive and managing director Atul Sobti announced his resignation. Ranbaxy’s new managing director will be Arun Sawhney, currently president of the global pharmaceutical business at the firm.
Sawhney will take over from Sobti on 20 August. Sobti, who joined Ranbaxy in 2007 and became chief executive and managing director last year, cited differences with Japanese drug maker Daiichi Sankyo Co. Ltd, which acquired the Indian firm in 2008, as the reason for his exit.
“Over the last couple of months some differences emerged and we discussed them. But even after that there was clearly a difference that could be bridged. So it was time to move on,” he said.
Meanwhile, Ranbaxy posted strong quarterly results for the fifth quarter in a row. Its revenue for the second quarter ended 30 June (the company follows the calendar year for accounting purposes) stood at $458 million, an increase of 22% from a year ago. And though the company’s profit after tax for the quarter fell from $139 million last year to $72 million this year, the decline was due to a forex loss of $70 million.
“We had a forex gain of $176 million last year in the second quarter, while this year, it was a loss of $72 million. So the operating profit is actually $100 million,” said Omesh Sethi, chief financial officer.
The numbers exceeded analysts’ expectations.
“It’s a very good result. Ranbaxy also got payment from Daiichi for the sale of its research and development business,” said a Mumbai-based analyst with a foreign brokerage who did not want to be named.
Ranbaxy, which sold its new drug discovery research assets to Daiichi this quarter received a payment of Rs144 crore for the sale.
Its North American revenue for the quarter was $160 million, a 100% increase over last year. And European revenue grew 15% to $69 million; India sales remained almost stagnant at $98 million.
Sobti’s successor Sawhney has around three decades of global experience in the chemical and pharmaceutical industries. His appointment was recommended by Sobti.
“He (Sobti) was always the temporary head of Ranbaxy. When Malvinder (Mohan Singh) left a year ago, Daiichi had to find someone quickly, and Sobti being the senior-most was asked to take charge. Now, someone with more experience in this industry will take over,” a person familiar with the development said on condition of anonymity.
Shares of Ranbaxy fell 0.47% to close at Rs445.2 each on a day when the Bombay Stock Exchange’s Sensex rose 0.02% to close at 18,073.9 points.