Ranbaxy net down 63%

BS 200 SCORECARD

Malvinder Singh takes over as CEO & MD, while Tempest is chief mentor.

Malvinder M Singh, the scion of the promoter family of Ranbaxy Laboratories, took charge as the chief executive officer and managing director of the company today.

Malvinder takes over from Brian Tempest, who, under an "Infosys-like model" has become the chief mentor and executive vice-chairman. Malvinder's brother Shivinder has joined the company's board as a non-executive director.

The company today announced a 62 per cent decline in net profit for 2005 to Rs 259.1 crore from Rs 698.6 crore in the previous year.

Its consolidated sales for the year ended December 31, 2005, declined by 2.2 per cent to Rs 5,195.6 crore.

In the last quarter, Ranbaxy's global sales declined 2 per cent to Rs 1,405.5 crore while its profit after tax declined by 57 per cent to Rs 68.6 crore.

"Our net profit has declined on account of research expenses, price erosions in the US and litigation pressure. We intend to undertake cost-cutting measures and increase operational efficiencies," explained Malvinder.

He also pointed out that several acquisition proposals were in the pipeline, with the possibility of one such acquisition taking place this year.

While the acquisitions in the US would be to attain "critical size", those in Europe would be "an entry strategy as well". The company has entered newer markets such as Spain, Canada and Italy, and plans to focus on Japan in a big way.

"Europe has emerged as the strong second growth engine for us. Even Japan would become more important now," he added. Ranbaxy increased its stake to 50 per cent in its Japanese joint venture with Nippon Chemiphar Co recently.

"We are on course to achieving $2 billion mark by 2007 and $5 billion by 2012. We anticipate 18 per cent growth in our revenues and about 16 per cent in our EBIDTA margins. There would be no pulling back in our strategy," said Malvinder, reacting to queries on a change in the business model.

His rise to the top was believed to be in the offing for sometime.