New Delhi: Pharmaceutical giant Cipla Ltd posted a 33% decline in its consolidated net profit for the January-March quarter to ₹246 crore as the company’s operational performance was weakened by the covid-19 disruption and high base for sales last year.
Cipla’s consolidated operating margin contracted by 7 percentage points to 15%, with 2 percentage points being the impact from covid-19 related extension in cut-off, the company said in a release.
The reporting quarter also saw the normalisation of margins and US revenue as the corresponding period last year saw robust sales of its anti-hyperparathyroidism drug cinacalcet in the US.
The company’s consolidated topline slipped 1% to ₹4,376 crore, dragged by a one-fourth drop in revenue from its second largest market, the US.
However, the Mumbai-based drugmaker’s largest market, India, clocked a 12% growth in sales at ₹1,730 crore, aided by growth in its chronic segments.
Cipla’s costs were up 3.6% at ₹4,141.5 crore primarily as expenses on account of purchase of stock in trade soared by more than two-thirds.
“Our purchased finished goods are for generics business, and about 30-40% of the prescription business and over the last few months, we have shifted some of the other market supplies as well to contract manufacturers. So depending upon the mix, it (cost on purchase of stock in trade) has gone up. There is nothing unusual there," Cipla chief financial officer Kedar Upadhyaye said in an investor conference call.
Cipla chief executive officer Umang Vohra during the conference call said that the company’s product inventory at the stockist level had reduced sharply in the last week of March due to panic buying, especially of chronic medicines, but had somewhat recovered in April as the buying subsided.
The lockdown in India due to covid-19 has led to an uncertainty in demand and that the company continues to monitor it on a week-by-week basis, especially as monsoon approaches, which is generally when demand for anti-infectives rises, the management said in a conference call.
Sales of medicine for acute diseases, especially anti-infectives, have been severely hit in April by the lockdown.