Ranbaxy Q2 net soars 118%

CORPORATE SCORECARD

Foreign exchange gains worth Rs 100 crore and health business growth in key emerging markets such as India, Russia, South Africa and Romania helped the country's leading drug maker Ranbaxy post a 118 per cent growth in its net profit in the second quarter ended June 30.

The profits jumped to Rs 266.2 crore compared with Rs 122.11 crore in the corresponding period in 2006. The forex gains were primarily due to the $400 million foreign currency convertible bond (FCCB) issued by Ranbaxy in 2006. Net sales grew 12 per cent to Rs 1,623.8 crore compared with Rs 1,446.4 crore for the same period of the previous year.

The company's business in the emerging markets grew 44 per cent during the quarter, contributing as much as 54 per cent to its global sales.

"A focus on branded generics, accelerated generic substitution and the fundamental strength of our base business across key markets characterised the strong performance for the quarter."

The growth will be much stronger in the coming quarters," Ranbaxy CEO and Managing Director Malvinder Singh said.

Ranbaxy's cholesterol lowering Pravastatin 80 mg tablets, launched in the US under a 180-day exclusivity period during June end, has garnered 50 per cent sales in the prescription market.

While the initial revenues from Pravastatin is reflected in the current quarter, the complete gain will be seen in the coming months. The drug has a market size of $209 million in the US.

Global sales registered an increase of 25 per cent to $395 million. The emerging markets contributed 54 per cent to total sales recording 44 per cent growth while revenues from the developed markets grew 16 per cent.

India, Russia, Ukraine, Romania and South Africa were the primary drivers of performance in the emerging markets, while Europe contributed significantly to the growth in the developed markets, the company said.

South Africa, the largest country for the company's business in the African continent, recorded sales of $13 million, up 82 per cent than the corresponding quarter in 2006. The growth was driven by the business from its South African subsidiary Be-Tabs, the acquisition of which was completed in May 2007.

"We will be launching over 100 products globally during the year. This would span all geographies and therapeutic areas. Ranbaxy is also expecting strong business from newer areas such as Penams, biologicals and injectables. All these products will be first introduced in the emerging markets and will eventually (within two years) be launched in the developed markets of the US and Europe," Singh said.

For the half year, the company recorded sales of Rs 3,188.2 crore, 17 per cent higher than Rs 2,721.7 crore recorded in the previous comparable period. Net profit for the period was Rs 394.9 crore, 104 per cent higher than Rs 194.1 crore. Earnings per share on a fully diluted basis was Rs 6.75 (Rs 5.15).