DRL drubs Ranbaxy in sales stakes

Ranbaxy's decade-long dominance as the country's biggest pharmaceutical company by sales has come to an end. Dr Reddy's Laboratories, the third largest drugmaker for a long time, clocked Rs 6,434.6 crore ($1.57 billion) sales in 2006-07 to dethrone Ranbaxy, which had Rs 6,096.8 crore ($1.49 billion) sales during the year ended December 31, 2006. Ranbaxy's sales for the trailing 12 months stood at Rs 6,358.9 crore ($1.55 billion).

Dr Reddy's march over its rival was possible due to 174 per cent increase in the company's sales, primarily contributed by an additional revenue flow from the operations of Betapharm, the German company it acquired in 2006.

Dr Reddy's Betapharm acquisition for $572 million remains the biggest ever in the Indian pharmaceutical space. With Dr Reddy's giving a guidance of 30 per cent growth compared with Ranbaxy's 20 per cent growth projection for 2007-08, the former's leadership position is likely to continue for the current year, according to analysts.

The company that got pushed to the third position is Cipla, which registered an annual turnover of Rs 3,572.14 crore for 2006-07. Dr Reddy's 2005-06 net sales were Rs 2,346.57 crore, lesser than Cipla's Rs 2,985.88 crore for the same period.

Commenting on the achievement, G V Prasad, vice-chairman and CEO of Dr Reddy's, said the company's had seen a fantastic turnaround to reach the leading position.

"We have reached a position of great strength to become the largest and most profitable pharmaceutical company in India. We have thus created a strong financial foundation, upon which we build the future," Prasad said.

The revenues from the international markets for Dr Reddy's increased by 250 per cent to $1.3 billion and contributed 86 per cent to the total turnover.

Revenues from authorised generics contributed 24 per cent and acquisitions 21 per cent to the total revenues. Dr Reddy's, established in 1984, had crossed the $1 billion mark turnover in December 2006.

Dr Reddy's growth through the inorganic route is in tune with the global growth projections for the Asian pharmaceutical sector.

A PricewaterhouseCoopers analysis, published on May 21 based on interviews with 185 CEOs of pharma companies, found that the Asian pharmaceutical industry, especially Indian and Chinese, is gearing up to be at the centre of the global market.

"Indian companies had the strongest appetite for acquisitions and the least appetite for divestments. Forty eight per cent of the Indian pharmaceutical companies were considering acquisitions compared with 31 per cent in Singapore and just 17 per cent of the Chinese companies," the PwC report said.

---

MAGIC POTION

Dr Reddy's clocked Rs 6,434.6 crore ($1.57 billion) sales in 2006-07 to dethrone Ranbaxy, which had Rs 6,096.8 crore ($1.49 billion) sales during the year ended December 31, 2006

The revenues from the international markets for Dr Reddy's increased by 250 per cent to $1.3 billion and contributed 86 per cent to the total turnover

Dr Reddy's march over its rival was possible due to 174 per cent increase in the company's sales