Novartis India, a Rs 500-crore plus MNC, has recorded a strong growth of 84 per cent in its net profit during the year ended March 2004 and the company declared equity dividend of 200 per cent.
Its net profit touched Rs 114 crore from Rs 62 crore during the previous year. The company's sales improved by 7 per cent to Rs 505 crore from Rs 472 crore. The pharmaceutical business was a key contributor to profits, which were augmented by a sum of Rs 14 crore towards reversal of provisions made for wealth tax in prior years. Its pharmaceutical sales registered a growth of 6.2 per cent and reached at Rs 310 crore. The higher segment revenue was attributable to higher sales and improved margins.
During the period under review the company the first pharmaceutical company in India to received Exclusive Marketing Rights for Glivec used in the treatment of chronic myeloid leukemia and gastrointestinal stromal tumours.
The company's generics business achieved sales of Rs 109 crore, representing a growth of 9.8 per cent. Sales growth came primarily due to the company being awarded the World Bank funded tender for supply of anti-TB products to the Government for its Directly Observed Treatment Short-term (DOTS) programme. The company has executed deliveries of Rs 11 crore towards this tender (total value Rs 21 crore) during the period under review.
The rifampicin market has been facing severe operational challenges for some time mainly due to surplus capacities, cheaper imports and falling domestic prices. The company does not expect any significant change in this scenario and continues its efforts to find an optimal way forward for this business. In view of this, it impaired assets of its Mahad facility inline with Accounting Standard 28 for Impairment of Assets. The resulting loss of Rs 65 crore has been adjusted against opening General Reserve.
Novartis' animal health sales at Rs 38 crore were 4 per cent lower than the previous year. This was primarily due to the phasing out of some product lines, the continued impact of drought in some parts of the country and the adverse impact of bird flu.