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Though its consolidated revenues were up 22 per cent year-on-year to Rs 2,581 crore in the financial year’s third quarter (October-December), on the back of a strong exports performance, higher costs dented profitability, leading to a 16.5 per cent fall in net profit to Rs 284 crore for India’s third largest drug maker, Cipla. Domestic revenue grew 12.6 per cent to Rs 1,044 crore on account of growth in respiratory, anti-infectives and cardiology segments. Export formulations saw a growth of 34 per cent to Rs 1,352 crore, on the back of anti-retroviral, anti-cancer, anti-alergic and anti-biotic segments. The company gets 59 per cent of its revenue from sales abroad.
While revenue was ahead of the Bloomberg consensus estimates of Rs 2,437 crore, net profit was way lower than the estimated Rs 367 crore. The reason for the shortfall in profit was the dip in margins.
Ebitda (earnings before interest, taxes, depreciation and amortisation) margins for the reporting quarter were down 660 basis points to 18 per cent due to exposure to lower margin anti-retroviral segment, higher employee costs and other expenses.
While raw material cost to sales went up 130 basis points year-on-year to 39.1 per cent, employee costs were up 46 per cent to Rs 402 crore, and other expenses were up 33 per cent to Rs 711 crore. In addition, the company indicated only 2.5 months of Cipla Medpro financials was reflected in the quarter last year (versus the complete quarter this year) as well as the revenue from the new Uganda acquisition was also not available last year. To that extent, the performance is not truly comparable.
“Pursuant to acquisition of 14.5 per cent additional stake in Quality Chemical Industries Ltd (QCIL), a pharmaceutical company, incorporated in Uganda (hitherto an Associate) became a subsidiary of the company on November 20, 2013. Accordingly, the above consolidated results for the current period includes the relevant results of QCIL from the date QCIL became subsidiary and, hence, the corresponding figures for the previous period are not comparable,” said the company in a statement.
With inputs from Reghu Balakrishnan
