The Hindu Business Line : Cipla Q3 net up; sales post growth

Mumbai, Jan. 22 As is the case with other sectors, the next 12 months will be difficult, as a result of the uncertainity and economic gloom in the global market, observes Mr Amar Lulla, Cipla’s Chief Executive Officer.

The company’s performance in the three months under review, ended December 31, 2008, saw domestic sales grow by over 11 per cent and export sales grow by more than 37 per cent. This was largely on the back of a 59 per cent growth in finished medicine forms, the company said. However, the active pharmaceutical ingredients segment had not grown on account of lower sales of certain key bulk drugs, the company added.

Cipla has provided Rs 42 crore as net loss for the quarter on revaluation of forward contracts, outstanding debtors and foreign currency loans consequent to the depreciation of the rupee against the dollar.

Material costs also decreased during the quarter, due to improved exports on account of favourable exchange rate due to the depreciation of the rupee and changes in product mix, the company said. This impact is also reflected in increased operating margins, as compared to the previous year, since exports are booked at prevailing exchange rates.

Staff costs

The company also saw an increase of about 21 per cent in staff cost, at Rs 13 crore on account of overall increase in manpower. Other expenditure was also up by about 27 per cent at Rs 70 crore, on account of increase in manufacturing expenses at Rs 17 crore, processing charges at Rs 9 crore and sales expenditure at Rs 32 crore.

Cipla shares were down close to 4 per cent on the BSE, at Rs 172.

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