Glenmark net profit drops by 31% to Rs80.88 crore

Glenmark net profit drops by 31% to Rs80.88 crore

Mumbai: Drug maker Glenmark Pharmaceuticals Ltd posted a 31% drop in net profit to Rs80.88 crore in the September quarter from the year-ago quarter’s Rs117.36 crore.

Small growth in sales, increased raw material and interest costs, and pricing pressure on some of its key products in the US led to the decline.

Glenmark’s sales grew 5% to Rs590.32 crore in the quarter against Rs559.71 crore a year ago. The firm’s raw material and interest costs increased significantly during the quarter to Rs171 crore and Rs45.61 crore, respectively, from Rs142 crore and Rs18.7 crore.

According to sector analyst Kirit Gogri of Quant Capital, a financial services firm, Glenmark, which had given a profit guidance of between Rs300 crore and Rs400 crore, has now fixed it at Rs300 crore.

“This shows that the low performance will remain in the coming quarters for the company," Gogri said.

A Glenmark spokesman said that the increased costs were not exactly a cause of concern for the year ahead as a fresh capital infusion will be mainly used to repay debt in the remaining two quarters of the fiscal year to March and the higher material cost can be adjusted by a possible price increase. “So we haven’t really changed the revenue guidance for the year."

“Sales growth across most regions for the quarter has improved," chief executive officer and managing director Glenn Saldanha said in a statement.

“For the remaining part of the year, we expect demand conditions to improve across all our operating regions," Saldanha said. “While the US generics and the India formulations businesses should continue to grow, the remaining regions are also expected to register good growth rates."

Glenmark shares dropped 1.72% to close at Rs216.60 on Bombay Stock Exchange on Thursday. The benchmark index, the Sensex, declined 1.42% to 16,052.72 points.