Mumbai: Piramal Healthcare Ltd reported a more than 13% fall in its second-quarter net profit, hurt by notional forex losses, as the company deferred a fund-raising plan for its research unit.
“However, the Mumbai-based company expects to maintain its full-year forecast of Rs12 earnings per share on a 16% revenue growth and 20.5% operating margins,” chairman Ajay Piramal said.
“The foreacast excluded any forex-related charges,” he added.
“In spite of what is happening in the market, we are confident of maintaining our guidance. Our second half of the year will be stronger,” he said.
“I don’t see much of a slowdown in demand either in domestic or contract manufacturing business,” he said.
“The company was also looking at acquisitions in the domestic market and in US and Europe,” Piramal added.
“Valuations are more reasonable. We are looking for acquisitions. There must be a strategic fit.” he said.
This year, Piramal bought Germany-based PlasmaSelect AG’s blood plasma expansion products and acquired two brands from the Indian firm Khandelwal Laboratories and also bought Bangalore-based Healthline Pvt Ltd’s drug business.
For the quarter to September, the company posted a net profit of Rs733.9 million after providing Rs408.1 million in forex-related losses on its external borrowings, which total about Rs3 billion.
In the year-ago quarter, Piramal had a notional foreign exchange gain of Rs34.6 million.
Piramal Healthcare, which offers contract manufacturing services and sells formulation in the domestic market, saw formulations sales rise about 27% while custom manufacturing revenue grew 8.5% in July-September.
The shares, which have fallen 28.8% this year, ended 7.9% lower at Rs219.60 in a Mumbai market, which fell 5.3%.
Defers dilution in unit
“Piramal Life Sciences in which Piramal Healthcare holds a little under 20%, has stopped talks with potential investors to raise funds by issuing additional shares,” Ajay Piramal said.
“No serious talks are going on at the current moment. We will do it at an appropriate time,” he said.
Piramal Life, which was spun off and listed in May, was looking for funds to finance its drug development costs. The company has about 14 drugs under various stages of development.
“We are not constrained for funds,” Ajay Piramal said.
“We can probably go on for a couple of years,” he added.
Piramal Life is the only pure drug research company to be listed on the Indian stock exchange besides Sun Pharma Advanced Research, which was spun off from Sun Pharmaceutical Industries.