The top 75 pharmaceutical companies in India have reported impressive growth in sales and profits during the year ended March 2008 despite adverse market conditions in the domestic and international markets. The net profit of these 75 companies rose by 26.4 per cent whereas their sales increased by 17.3 per cent during 2007-08.
The Pharmabiz study of these 75 pharma companies show that their sales rose to Rs 65,559 crore during 2007-08 from Rs 55,878 crore recorded in the previous year. The study has consolidated as well as standalone figures of 75 companies. Consolidated figures are giving better perspective as these figures includes working of subsidiaries and joint ventures.
Out of the sample of 75 companies, 48 companies recorded double digit growth in net sales and 17 companies achieved only single digit growth. Remaining 10 companies failed to maintain their previous level of net sales, which includes major companies like DRL, Aventis Pharma, Panacea Biotec, Stride Arcolab, Merck Ltd and Dabur Pharma.
In the terms of net profitability, 49 companies improved their net profit by double digit or more, 6 companies managed only single digit growth, 14 companies failed to improve net profit, two companies reduced net loss and 4 companies increased there net loss during 2007-08. Matrix Laboratories incurred a net loss of Rs 456.93 crore during 2007-08 from a net profit Rs 76.31 crore and that of Stride Arcolab net loss amounted to Rs 50.12 crore as against a net profit of Rs 40.23 croer.
Out of 75 companies, 19 companies recorded net sales of Rs 1000 crore or more during 2007-08 as against 14 companies in the last year. The total net sales of these 19 companies increased by 16.9 per cent to Rs 46,981 crore as against Rs 40,201 crore. The aggregate net sales of these 19 companies worked out to 71.7 per cent of the 75 companies. Thus, the performance is largely impacted by these large companies. Similarly, the net profit of these 19 companies increased by 24.1 per cent to Rs 7,512 crore. The net profit of 19 companies worked out to 63.1 per cent of total net profit of 75 companies.
Ranbaxy Laboratories has once again stands at No 1 position with consolidated net sales of Rs 6,982 crore among the 75 companies by pushing Dr Reddy's Laboratories (DRL) to second spot with net sales of Rs 4,914 crore. DRL's net sales declined sharply by 23.6 per cent from Rs 6,435 crore in 2006-07. Cipla maintained its third position with net sales of Rs 4,227 crore. Sun Pharmaceutical climbed up to fourth place with net sales of Rs 3,357 crore from fifth position in the last year. It overtook Nicholas Pirmal, which went down to fifth place with net sales of Rs 2,873 crore.
Lupin achieve net sales growth of 34.4 per cent to Rs 2,706 crore and win the sixth position as against seventh in the last year. Wockhardt's net sales jumped up by 53.4 per cent to Rs 2,653 crore and reached at 7th spot during 2007-08 from earlier 10th spot. Though Jubilant managed its ranking at 8th position, its pharmaceutical sales were only at Rs 1,530 crore. Aurobindo Pharma lost its 6th position and went down to 9th position in 2007-08. Cadila also moved from 9th to 10th position with net sales of Rs 2,266 crore.
As per the Pharmabiz sample, the first 25 pharma companies according to net sales contributed 79 per cent (Rs 51,830 crore) and there net profit contribution worked out to 81.8 per cent (Rs 7,963 crore) in 2007-08 among 75 companies. The second set of 25 companies contributed 15.4 per cent (Rs 10,090 crore) to aggregate net sales of 75 companies and 16.4 per cent (Rs 1597 crore) to net profit and the third set of 25 companies contributed only 5.7 per cent (Rs 3,708 crore) and 1.9 per cent (Rs 181 crore) in net sales and net profit respectively. Thus, the first 25 companies dominated the overall performance of 75 companies.
Sun Pharma maintained its position as the most profitable company among the 75 during the year 2007-08 with net profit of Rs 1,488 crore as against Rs 784.27 crore in the previous year, a significant growth of 89.6 per cent. Ranbaxy clinched second position with net profit of Rs 774.49 crore and Cipla maintained its profitability ranking at third spot with net profit of Rs 700.48 crore. Glenmark's net profit went up sharply by 104 per cent to Rs 631.26 crore and the company win the fourth place in terms of profitability.
Though the net profit of GlaxoSmithKline Pharma declined by 1.4 per cent, its profit rank is gone down to fifth place from fourth place last year. DRL suffered heavy setback and went down from first position in profitability to 7th position in 2007-08. The net profit of DRL declined to Rs 438.13 crore from Rs 965.89 crore.
The other income of 75 companies increased sharply by 62.4 per cent to Rs 2,858 crore from Rs 1,760 crore mainly due to significant additions in other income by major companies like Ranbaxy, Pfizer, Stride Arcolab, Aurobindo Pharma, Aventis Pharma, Dishman Pharma, Glenmark Pharmaceuticals and Biocon. Ranbaxy's other income went up to Rs 443 crore from Rs 68.28 crore due to exchange gain of Rs 307 crore. Similarly, Pfizer's other income jumped to Rs 343.07 crore from Rs 59.60 crore on account of profit on sale of assets. The other income of Sun Pharma declined by 40.1 per cent to Rs 145.13 crore from Rs 242.45 crore.
The raw material cost, including purchased and stock adjustments, increased only by 14.8 per cent to Rs 28616 crore from Rs 249.35 crore in the previous year. The rupee appreciation reduced the imported cost of raw material. With major expansion in the international market as well as domestic market pushed the staff cost by 22.7 per cent to Rs 7559 crore during 2007-08 from Rs 6,163 crore in the previous year. The other expenditure of 75 companies went up by 18.5 per cent to Rs 16,444 crore from Rs 13,880 crore. Thus the total expenditure of 75 companies went up by 17 per cent to Rs 52,619 crore from Rs 44.978 crore in the 2006-07.
The earning before interest, depreciation, taxation and extra-ordinary items shown a strong growth of 24.8 per cent to Rs 15,798 crore in 2007-08 from Rs 12,659 crore in the previous year. With significant investment in R&D, expansion programmes, mergers and acquisitions, the interest cost of these 75 companies increased by 31.8 per cent to Rs 1,414 crore from Rs 1,073 crore. Similarly, there depreciation provision increased by 21.1 per cent to Rs 2,71 crore from Rs 2,041 crore. The rise in interest and depreciation provision not impacted adversely and there profit before tax moved ahead by 24.8 per cent to Rs 11,913 crore from Rs 9,546 crore. The taxation figure increased only by 15.9 per cent to Rs 2,128 crore from Rs 1,836 crore.
Out of 75 companies, 11 companies are part of the multinational giants abroad. The net sales of 11 MNCs increased only by 4.3 per cent to Rs 7,279 crore from Rs 6976 crore. However, there net profit declined sharply by 26.6 per cent to Rs 991 crore from Rs 1351 crore mainly due to heavy loss of Rs 457 crore for Matrix Laboratories and fall in net profit of Aventis Pharma, GlaxoSmithKline Pharma (GSK), Merck and Wyeth. Aventis net profit declined to Rs 144 crore from Rs 169 crore. GSK's net profit declined to Rs 538 crore from Rs 546 crore and that of Merck's net profit dwindled to RS 68 crore from Rs 133 crore.
Despite poor performance by MNCs as compared to Indian companies, MNCs declared handsome dividends to shareholders. AstraZeneca paid equity dividend of 750 per cent in 2007-08 as against 600 per cent in the previous year. Solvay paid dividend of 400 per cent, Merck and Novartis India maintained equity dividend at 200 per cent, Abbott India at 175 per cent and Wyeth maintained at 300 per cent for the year 2007-08. Indian companies like Ranbaxy, Biocon, Divi's Lab, DRL, FDC, Jubilant Organosys, Lupin, Nicholals Piramal (Name changed to Piramal Healthcare), Sun Pharmaceutical, Wockhardt, etc., also declared dividend more than 100 per cent.
View Table 1 Information
View Table 2 Information