Disappointing quarter for Ranbaxy Labs

Ranbaxy Laboratories, India’s largest drug company by sales, has registered a net loss of Rs 97.4 crore for the fourth quarter ended December 31, 2010. Revenue for the period was Rs 2,066 crore, about 9.8 per cent lower than the Rs 2,269.9 crore registered during the comparable quarter the previous year.

The company also predicted flat growth for the year 2011, which analysts say led to its share price on the Bombay Stock Exchange to drop three per cent, to close at Rs 494.2 a share today.

“The guidance for muted growth indicates the uncertainity the company has in monetising their 180-day market exclusivity opportunity for Lipitor from November 2011 onwards,” said Ranjit Kapadia, vice president, institutional sales, HDFC Securities.

The eight per cent growth of Ranbaxy’s domestic business as compared to the industry growth of 17 per cent was also a concern for stock market analysts.

For the whole year, Ranbaxy’s revenues grew 16 per cent to Rs 8,550.7 crore as against Rs 7,344.1 crore for 2010. The net profit at Rs 1,496.8 crore was five-fold bigger than Rs 296.5 crore for the previous year.

Arun Sawhney, managing director, said growth during the year was attributable to the 80 per cent growth in its US earnings of Rs 2,744.8 crore on account of limited period exclusive market opportunities.

“On the cost side, we have gained from greater efficiencies in manufacturing,” he stated.

Japanese drug major Daiichi Sankyo holds majority stake in Ranbaxy.