The Hindu Business Line : Ranbaxy Q1 net profit rises 79% at Rs 128.7 cr

BULLISH OUTLOOK: Mr Malvinder Mohan Singh, CEO and Managing Director, Ranbaxy Laboratories, with Mr Atul Sobti, Chief Operating Officer, addressing a press conference in the Capital on Friday. - Kamal Narang

New Delhi April 27 Ranbaxy Laboratories reported a growth of 79 per cent at Rs 128.7 crore in net profit for the first quarter ended March 31, 2007, compared to Rs 71.8 crore for the corresponding previous quarter.

Sales grew 23 per cent to Rs 1,564.4 crore as against Rs 1,263.1 crore for the same period last year.

Operating profit before tax doubled to about Rs 160 crore, from about Rs 80 crore. Operating margin for the quarter at 12.1 per cent was marginally higher compared to last year.Earnings were helped by a Rs 24-crore forex gain due to the rupee's appreciation against the dollar, according to Mr Atul Sobti, COO, Ranbaxy.

Earnings per share on a fully diluted basis were at Rs 2.61 compared to Rs 1.91 last year.

Ups guidance

Ranbaxy, which derives 79 per cent of its sales from international markets ($281 million this quarter), upped its guidance for the year to 20 per cent for sales growth and 16 per cent for EBITDA.

The biggest contribution came from emerging markets, which account for 54 per cent of the company's sales and earned it $192 million this quarter, reporting a growth of 53 per cent. The markets include India, Romania, CIS, South Africa, Central and Eastern Europe and Latin America. In India, where Ranbaxy claims market leadership, sales grew 26 per cent to $65 million. In rupee terms, the growth is 24 per cent, led primarily by drugs in the acute and chronic therapy categories. During the quarter, 18 new products were launched.

Romania, post its inclusion into the EU, helped European sales grow 78 per cent to $93 million for the quarter, with Romania growing at 50 per cent and contributing $37 million. Its Romanian facility Terapia has been converted into the company's hub for the continent.

However, Western Europe, in comparison, recorded a combined turnover of $34 million for the quarter, registering a growth of 7 per cent only.

The North American market also saw a growth of only 3 per cent to $91 million, with the US accounting for $86 million.

Anti-cholesterol drug

The long wait for USFDA approval for the anti-cholesterol drug Pravastatin will push over commercial benefits from the sale, particularly for that of 80 mg strength into the second quarter. Ranbaxy hopes to gain a considerable share of the estimated $209-million market for the same.

In May, Ranbaxy also hopes to close its acquisition of the South African facility Be-Tabs pharmaceuticals. And that will, according to Mr Malvinder Mohan Singh, CEO and Managing Director, Ranbaxy, along with the launch of Pravastatin in the US, "significantly strengthen results of the next two quarters." On Friday, the scrip of the company on the BSE dropped 0.59 per cent to Rs 369.95 from previous close of Rs 372.15.

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