Two Ahmedabad based pharmaceutical majors, Dishman Pharmaceuticals & Chemicals Ltd and Torrent Pharmaceuticals Ltd, have posted a dip in net profit in the fourth quarter (Q4) of 2010-11 fiscal, despite a rise in sales. While there is a decline of 31.2 per cent in Dishman's Q4 net profit, Torrent Pharma posted a 27.56 per cent dip in its net profit.
Dishman's net sales during the quarter under review was up by eight per cent to Rs 990.84 crore, while its net profit stood at Rs 80.10 crore, down by 31.2 per cent from Rs 117.37 crore in the same period last fiscal. JR Vyas, managing director, Dishman Pharma said that the performance of the company's Swiss subsidiary Carbogen Amcis AG has caused the dent in its net profit. Carbogen Amcis contributed nearly 50 per cent to Dishman's revenues. Moreover, the contract research and manufacturing services (CRAMS) segment did not record significant growth, remaining flat at Rs 660 crore. "Globally, there has been a slowdown in the CRAMS business, but, we already have orders from both the domestic and international clients, which will boost our revenues in the coming quarters. Also, we may consider raising prices by 20-25 per cent to improve profitability.", Vyas said.
Torrent Pharma’s Q4 net sales were up by nine per cent to Rs 498 crore, however, its net profit was down by 27.56 per cent to Rs 42.84 crore. A company spokesperson informed that the profits were affected due to planned expansions in domestic and international markets. "As our operational expenses have gone up thanks to several product development and market development initiatives, the profits during the fourth quarter have been hit.", he added.
The company launched a new division to improve focus on select products in diabetic segment and is continuing to invest in market development activities for its recent expansions into extra urban markets and gynaecology segment. While its international sales jumped eight per cent to Rs 263 crores, the domestic formulations business recorded sales of Rs 180 crore, growing by nine per cent.
Torrent said in a statement that significant investment in product development is being made to support the build-up of US, Europe and Brazilian operations. The total revenue expenditure on R&D was 6.2 per cent of consolidated net sales and operating income. Torrent Pharma has also recently commissioned its oral solids manufacturing plants at Sikkim.
