India's top 20 pharmaceutical companies have established a record number of 545 subsidiary companies mainly in the US, Europe, Japan, Africa, Australia and India over the years mainly for marketing and promotion of their products. Manufacturing plants of these companies in these locations are, however, very few on account of the cost disadvantage outside India.
Among the 20 companies, Sun Pharmaceuticals has the largest number of subsidiaries at 67 followed by Dr Reddy's Labs and Strides Arcolab both having 55 subsidiaries each. And India's largest pharma company, Ranbaxy Labs, is having only 49 subsidiaries. Aurobindo and Jubilant have setup 43 and 46 subsidiaries respectively.
Out of the 545 subsidiaries belonging to 20 companies, only 11 of the companies are having annual turnover above Rs.600 crore from their 25 subsidiaries. Pharmabiz has selected 25 of these subsidiaries with sales above Rs.600 crore during the year ended March 2013 from major companies like Ranbaxy Lab, Dr Reddy's Labs, Wockhardt, Lupin, Sun Pharmaceutical Industries, Glenmark Pharmaceuticals, Cadila Healthcare, Aurobindo Pharma, Strides Arcolab, Piramal Enterprises and Jubilant Lifesciences. Sun Pharmaceutical, with six subsidiaries, has highest number in the Pharmabiz sample followed by Ranbaxy, DRL and Wockhardt with three subsidiaries each. Lupin, Glenmark and Strides Arcolab have two subsidiaries and Cadila Healthcare, Aurobindo Pharma, Piramal Enterprises and Jubilant Life Sciences one subsidiary each with income of above Rs.600 crore.
The 25 leading subsidiaries of 11 pharma majors' have registered turnover of Rs.50,181 crore during the year 2012-13 and contributed almost 58 per cent to consolidated net sales of 11 holding companies net sales of Rs.87,339 crore. These 25 subsidiaries registered profit before tax of Rs.8,322 crore. The net profit after tax worked out to Rs.7,033 crore as compared to there holding companies net profit of Rs.12,497 crore during 2012-13, a contribution of 56.3 per cent.
The year to year comparison is not possible as Sun Pharma's subsidiary Sun Pharma Laboratories and Piramal Enterprises' subsidiary DRI Holdco Inc have appeared for the first time. Further Sun's three subsidiaries viz., Taro Pharma USA Inc, Taro Pharma Inc. and Taro Pharmaceutical Industries have furnished figures for March 2011, which are not comparable.
Ranbaxy Pharma Inc, USA, a wholly owned subsidiary of Ranbaxy Laboratories has registered highest income of Rs.4,439 crore, a growth of 20 per cent, among the 25 leading subsidiaries, during 2012-13 and its net profit also moved up by 106.7 per cent to Rs.304.60 crore from Rs.147.35 crore in the previous year.
The turnover of DRL's Laboratories, Inc improved by 21.2 per cent to Rs.4,074 crore and remained at second position among 25 leading subsidiaries and the turnover of third largest Wockhardt Bio AG jumped by 102 per cent to Rs.3,873 crore. Lupin Pharma Inc, a subsidiary of Lupin posted strong growth of 55.2 per cent to Rs.3,762 crore from Rs.2,423 crore in the 2011-12. Ohm Laboratories Inc, belonging to Ranbaxy, pushed its turnover to Rs.2,828 crore during 2012-13 from Rs.307 crore in the previous year. The turnover of Sun Pharma Global (FZE), a subsidiary of Sun Pharmaceutical, moved up 106 per cent to Rs.2,044 crore and that of another US subsidiary, Caraco Pharma Labs increased by 90.5 per cent to Rs.2,789 crore from Rs.1,464 crore. However, Caraco's net profit declined sharply by 46.9 per cent to Rs.11.39 crore from Rs.21.44 crore.
The net profit after tax of Glenmark Generics Inc., USA, a subsidiary of Glenmark Pharmaceuticals, went up sharply by over 500 per cent to Rs.204.45 crore from Rs.32.59 crore in the previous year and that of its another subsidiary viz., Glenmark Generics improved by 102 per cent to Rs.453.94 crore from Rs.225 crore. Similarly, Wockhardt's subsidiary viz., Wockhardt Bio AG registered handsome net profit growth of 354 per cent to Rs.1,618 crore from Rs.356 crore in the previous year. Its another subsidiary, namely, Wockhardt US LLC also registered strong growth of 75.2 per cent to Rs.51.03 crore from Rs.29.13 crore. Strides Arcolab's Cyprus based subsidiary, viz., Agila Specialties Ltd notched up strong performance and posted turnover growth of 71.3 per cent to Rs.1,003 crore and net profit growth of 93.6 per cent to Rs.803 crore. Further Strides' Indian subsidiary, Agila Specialties Pvt Ltd also achieved turnover and net profit growth of 71.3 per cent and 35 per cent respectively.
The total assets of Ranbaxy Pharma Inc increased to Rs.12,859 crore during 2012-13 from Rs.8,589 crore and that of Sun Pharma Laboratories moved up sharply to Rs.18,939 crore from just Rs.11.68 crore. Similarly, the total assets of Sun Pharma Global (FZE) increased sharply to Rs.2,064 crore from Rs.176 crore. Piramal Enterprises' subsidiary DRI Holdco Inc has created total assets of Rs.1,950 crore. This shows that the Indian companies are building strong asset base in the International market.
Thus, the overall performance of leading pharmaceutical subsidiaries have shown significant growth in top line and bottom line during 2012-13 and likely to play important role in overall performance of Indian pharmaceutical segment in the current year.
Highlights of Leading 25 subsidiaries in 2012-13 & 2011-12