Cipla net up on cost savings; exports rise

Cipla net up on cost savings; exports rise

Mumbai: India’s second largest drug maker by domestic sales, Cipla Ltd, posted a 17.5% increase in net profit during the three months ended September on increased sales and cost savings.

Net profit rose to 309 crore during the quarter on a 9% rise in revenue to 1,778 crore, the company said on Monday. Profit growth was supported by savings on raw material costs in addition to increased interest income.

Exports to Africa were up 41% and the firm benefited from operational efficiencies in material consumption and product mix, said chief executive S. Radhakrishnan. Cipla’s sales in the domestic market grew on expected lines by 12%. Sales in Middle East were affected by changed market circumstances, said Radhakrishnan.

The firm recently opened a new plant at a special economic zone in Indore after an earlier proposal to set up an export-oriented unit in Goa ran into trouble. Radhakrishnan said in a phone interview that this plant had contributed exports worth at least 150 crore in the quarter.

The company expects sales to keep growing by 10-12% during the rest of the fiscal, he said.

Cipla had been expected to post a profit in the range of 280 crore to 290 crore in the quarter, according to market analysts.

The company beat those estimates, but its sales growth fell short of the industry average of 15% during the quarter.

Cipla’s nearest rival, Sun Pharmaceutical Industries Ltd, posted an increase of 42% in overall sales during the July-September quarter. Dr Reddy’s Laboratories Ltd and Lupin Ltd posted sales growth of 21% and 24%, respectively.

Sun Pharma’s chairman and managing director Dilip Shangvi had on Sunday said the performance delivered in the September quarter and in the first half, though partly aided by exchange-rate movements, reflected a steady effort made across all parts of its business towards sustainable long-term growth and profitability.

Cipla shares rose 0.49% on Monday to close at 288.15 apiece on BSE as the benchmark Sensex index fell 0.43% to 17,118.74.

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