The Hindu Business Line : Cipla Q4 net profit up on better product-mix

Mumbai, April 24 Drug-maker Cipla Ltd sees the year ahead being tough, as a result of intense generic competition and the slowdown in global markets. But the negative impact could be blunted by the company’s spread of exports across geographies, besides having products in several therapeutic segments, said Cipla’s Chief Executive, Mr Amar Lulla.

Cipla’s net profit for the quarter increased on the back of a better product-mix, he said. But the company also saw a forex hit of Rs 10 crore in the current quarter, against Rs 25 crore in the corresponding last quarter.

Cipla is unlikely to be hit by forex-related activity, going ahead, since it has accounted for all such activity, provided there is no major rupee-related fluctuation, he said. There has been an increase of 49 per cent in other expenditure (Rs 122 crore) on account of sales expenditure, foreign exchange loss and year-end provisions, the company said.

Domestic Sales

Cipla saw domestic sales grow by 16 per cent, while exports grew by 11 per cent, during the quarter under review. The company’s exports of active pharmaceutical ingredients, though, saw close to five per cent dip in the quarter. Cipla will increasingly focus on formulations that make for a more sustainable segment, he said.

Material cost has decreased during the quarter mainly because of favourable exchange rate and changes in product mix. This impact is also reflected in increased operating margins, as compared to the previous year, since exports are booked at prevailing exchange rates, the company said.

The company posted a net profit of Rs 767 crore for the year ended March 31, 2009, as compared to Rs 701 crore in the corresponding period last year. Total income increased from Rs 4,271 crore for the year ended March 31, 2008 to Rs 5,338 crore for the year ended March 31, 2009.

Cipla’s shares were up close to four per cent on the BSE, at Rs 239 on Friday.

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