Strides Arcolab received setback during the first quarter ended March 2006 as its consolidated net profit declined by 23.5 per cent to Rs 8.97 crore from Rs 11.72 crore in the corresponding period of last year. The fall in profits put pressure on earning per share, which nosedived to Rs 2.33 from Rs 3.39 in the similar period of last year.
The company's consolidated net sales improved by 28.3 per cent to Rs 1327 crore from Rs 1035 crore in the previous period. Its other income went up sharply to Rs 6.83 crore from Rs 0.58 crore. However, consumption of raw material and staff cost increased sharply by 26.2 per cent and 71.7 per cent respectively. Further higher provision for depreciation and taxation put significant burden on bottom line. The provision for depreciation increased by 63.8 per cent to Rs 7.88 crore and that for taxation increased to Rs 6.35 crore as against income of 0.85 crore.
The Indian operations announced strong growth from all its market segments. With the new Cephalosporin plant and the Sterile Products Division reaching critical operating capacities in the last phases of the quarter, the second quarter will see greater contribution from these segments.
Abbreviated New Drug Applications (ANDA) reviews and filings from the Akorn - Strides JV and certain key partners have commenced and the year will see substantial filings through the joint venture.
While the International operations' strong performance was led by Brazil and the recently acquired Italian operations, plant closures for renovations and expansions in USA affected the results of an otherwise strong quarter.
The US operations are currently undergoing an expansion and renovation to cater purely to the prescription/controlled substances and OTC segments of the market. The plant will recommence commercial production by end of Q3 2006. Cellofarm, the Brazilian operations has commenced the construction of a new facility for sterile dry powder injections. The plant, which is scheduled to commence commercial production in Q 2 of FY 2007 will be a global site for certain of Strides' specialized niche products.