Cadila Healthcare profit falls 29% to Rs337.6 crore
Mumbai: Cadila Healthcare Ltd’s consolidated net profit declined 29% on year in the September quarter because of muted sales growth and higher expenses.
Net profit for the quarter fell to Rs.337.6 crore from Rs.475 crore a year ago. Revenue rose to Rs.2,403.5 crore from Rs.2,394.9 crore.
Shares of the company plunged 8% in intraday. The stock ended at Rs.388.05 on the BSE, down 4.8% from the previous close, while the Sensex fell 0.9%.
“There was disappointment on the sales front, both in domestic market and the US,” said Meeta Shetty, assistant vice-president–research at Kotak Securities.
Sales in the US market fell 2% on year to Rs.990 crore while domestic sales were up 9% at Rs.820 crore.
Revenue from authorised generic of Asacol HD helped offset the impact of significant price erosion in base products and capped the fall in US sales, Pankaj Patel, chairman and managing director of Cadila Healthcare said in a conference call with analysts.
The company launched its authorised generic of Asacol HD, an ulcerative colitis medication, in the US in July.
Lack of product approvals owing to pending compliance issues with the US Food and Drug Administration (FDA) also weighed on the company’s sales in the US.
In December last year, Cadila Healthcare’s formulations unit at Moraiya and active pharmaceutical ingredients plant in Ahmedabad received warning letters from the FDA due to violations of manufacturing standards.
Remedial work at Moraiya plant has been completed and the company has invited the FDA for a re-inspection, Patel said, adding that once the plant gets clearance, the company will get a number of good product approvals in the US.
In the September quarter, Cadila Healthcare received just one product approval in the US. Patel expects to get approval for seven products by the end of December.