A Pharmabiz study of financial performances of 32 pharmaceutical companies with net sales of Rs.1000 crores and above during year ended March 2017 shows sharp decline in sales and profits. The poor performances by the companies were mainly on account of warning letteRs.from US FDA, adverse exchange rates fluctuations and growing competition. The net profit of 32 companies increased only by 2.2 per cent to Rs.27,392 crore during 2016-17 from Rs.26,808 crore in the previous year. Whereas their net sales increased only by 8.5 per cent to Rs.182,997 crore from Rs.168,627 crore. EBIDTA moved up by 6.6 per cent to Rs.46,449 crore from Rs.43,579 crore.
Sun Pharmaceuticals has maintained its leading positing in terms of turnover with net sales of Rs.30,264 crore during the year ended March 2017, a growth of 8.5 per cent. Lupin climbed to second spot, displacing Dr Reddy's Laboratories. Lupin's sales improved by 24.4 per cent to Rs.17,120 crore from Rs.13,758 crore. This was followed by Aurobindo Pharma at third rank with net sales of Rs.14,845 crore and Cipla at fourth rank with net sales of Rs.14,280 crore. Dr Reddy's Laboratories (DRL)went down to fifth place mainly due to quality problem at US FDA end. Its net sales declined by 7.7 per cent to Rs.14,081 crore from Rs.15,247 crore. Indoco Remedies and FDC Ltd entered the list for the first time with net sales crossing Rs.1,000 crore mark. Nectar Life has not declared its results and not included in the study.
Out of Pharmabiz sample of major 32 companies, net sales of five companies viz. DRL, Torrent Pharma, Wockhardt, Alembic Pharma and Pfizer declined during 2016-17 and 15 major companies including Sun Pharma, Aurobindo Pharma, Cipla registered sales growth of single digit only. However, Lupin Glenmark Pharma, Piramal Healthcare, Alkem Labs, Biocon, Strides Shasun, Ipca Laboratories, Abbott India, Natco Pharma, Ajanta Pharma Unichem Laboratories and J B Chemicals and Pharma registered double digit growth in sales. Natco Pharma achieved strong sales growth of 91.2 per cent to Rs.2,065 crore during 2016-17 from Rs.1,080 crore in the previous year.
Piramal Enterprise, engaged in pharmaceutical, financial services and information management, has posted net sales growth of 33.9 per cent basically because of strong growth in financial services segment of 93 per cent. Its pharmaceutical sales increased by 14 per cent to Rs.3,983 crore from Rs.3,486 crore. Glenmark's sales improved by 20.3 per cent to Rs.8,970 crore and that of Strides Shasun went up by 21.7 per cent to Rs.3,483 crore.
The earning before depreciation, interest, tax and adjustments (EBIDTA) of 32 companies increased by 6.6 per cent only as major companies like DRL, Cadila Healthcare, Torrent Pharma, Wockhardt, Alembic Pharma, Sanofi India, Pfizer, Aarti Drugs, Indoco Remedies suffered setback during 2016-17 and their EBIDTA declined significantly. The EBIDTA of Wockhardt declined sharply by 75.6 per cent to Rs.140 crore from Rs.576 crore and that of Torrent Pharma declined by 45.9 per cent to Rs.1,601 crore from Rs.2,959 crore. Alembic Pharma's profit declined sharply by over 39 per cent to Rs.617 crore from Rs.1,013 crore. DRL's EBIDTA declined by 31.9 per cent to Rs.2,644 crore from Rs.3,880 crore. Cadila's profit also declined by 17 per cent to Rs.2,030 crore.
However, Natco Pharma Vivimed Labs, Piramal Enterprises, and Strides Shasun registered strong growth in EBIDTA of over 60 per cent during 2016-17. Natco's EBIDTA went up by 153 per cent to Rs.697 crore from Rs.275 crore and that of Vivimed's moved up by 72.8 per cent to Rs.420 crore from Rs.243 crore. Piramal's profit increaed 93.5 per cent to Rs.3,733 crore from Rs.1,929 crore. Strides' profit increased by 60.3 per cent to Rs.811 crore and that of Ipca Labs' increased by 49.9 per cent to Rs.467 crore. Biocon also registered strong growth of 34.2 per cent in EBIDTA at Rs.1,137 crore.
Despite lowest growth in revenues and profits, these companies paid handsome dividends to shareholdeRs.During 2016-17.
Highlights March 2017