The leading 50 listed pharmaceutical companies notched up satisfactory financial performance during the first half ended September 2013 despite several odds like quality problems in US, new Drug Price Control Order, forex losses, interest burden and higher manufacturing costs. The net profit before adjustments and forex losses of these companies went up by 28.3 per cent to Rs.9,386 crore in the first half ended September 2013 from Rs.7,316 crore in the corresponding period of last year. There net sales also moved up by 16.8 per cent to Rs.60,196 crore from Rs.51,537 crore.
The Pharmabiz study of 50 companies, with net sales above Rs.170 crore for first half, did not include major companies like Ranbaxy Laboratories, GlaxoSmithKline Pharmaceuticals, Sanofi India, Strides Arcolabs, Fulford India, Plethico Pharmaceuticals, Abbott India, Merck, Claris Life Sciences and Sterling Biotech as there year ending is December and they announced results for nine months period ended September 2013. Similarly, Orchid Chemicals and Pharmaceuticals and Elder Pharmaceuticals have also not included in the study as these two companies changed their year ending recently.
Sun Pharmaceutical and Industries climbed to highest spot, displacing Dr Reddy's Laboratories (DRL). During the first half ended September 2013, Sun's net sales moved up to Rs.7,674 crore as compared to Rs.5,315 crore in the corresponding period of last year, a growth rate of 44.4 per cent. DRL went down to second spot with net sales of Rs.6,202 crore as against Rs.5,421 crore in the corresponding period last year. Lupin and Cipla maintained their ranking at third and fourth place with net sales of Rs.5,052 crore and Rs.4,587 crore respectively. Aurobindo Pharma clinched the fifth place by overtaking Cadila Healthcare and Wockhardt and its net sales increased by 34.3 per cent to Rs.3,597 crore from Rs.2, 678 crore in the similar period of last year.
There will be significant changes in sales ranking of pharma companies in India during the financial year 2013-14.Based on the current sales performance, Sun Pharma will move to top position followed by DRL and Lupin. Quality problems with US FDA will impact ranking of Ranbaxy Laboratories and Wockhard in the current year. Ranbaxy is likely to move to fourth place in sales ranking during the current year and Wockhardt may go down to ninth spot from eighth spot. Strides Arcolab will also lose its sales ranking due to sale of Agila Specialties Division to Mylan, Inc.
Among the Pharmabiz sample, the net sales of eight companies viz., Wockhardt, Nectar Lifesciences, Shasun Pharmaceuticals, Ind-Swift Laboratories, Novartis India, Dr Datsons Laboratories (formerly known as Aanjaneya Lifecare), Neuland Laboratories and Parabolic Drugs declined during the first half ended September 2013. The sales of Unichem Laboratories, Wyeth, TTK Healthcare and Bliss GVS Pharma increased less than five per cent during the period under review.
Relatively small companies registered higher growth in net sales during the first half of 2013-14. Suven Life Sciences has recorded highest growth of over 115 per cent in net sales during the first half ended September 2013 at Rs.260 crore from Rs.121 crore in the same half of last year. Similarly, SMS Pharmaceuticals' net sales moved up 85.7 per cent to Rs.211 crore and that of Sequent Scientific by 67.9 per cent to Rs.226 crore. Marksans Pharmaceuticals registered strong growth of 51 per cent in sales. The net sales of Piramal Enterprises, Granules India, Ajanta Pharma, Arvind Remedies, Ind-Swift, Vanati Organics and Shilpa Medicare notched up growth of over 30 per cent.
The other operating income of 50 companies increased by 29.7 per cent to Rs.925 crore from Rs.713 crore in the corresponding half of last year. The other operating income of Cipla went up sharply 158 per cent to Rs.224 crore during the first half of 2013-14 from Rs.86.78 crore in the similar half of last year. Torrent Pharma also registered hefty jump of 72 per cent in other operating income Jubilant Lifesciences, Piramal Lifesciences, Ipca Laboratories and Pfizer also registered higher other operating income. The other income of 50 companies increased by 61 per cent to Rs.1,351 crore from Rs.840 crore basically due to higher other income registered by Sun Pharma, Dr Reddy's Laboratories, Lupin, Piramal Enterprises, Divi's Laboratories, Hikal and Bliss GVS Pharma.
The raw material cost, including stock adjustments and purchases, increased by 11.4 per cent to Rs.23,512 crore from Rs.21,112 crore in the same half of last year. The staff cost increased by 21.3 per cent to Rs.9,594 crore from Rs.7,909 crore and other expenditure increased by 21.9 per cent to Rs.13,732 crore from Rs.11,265 crore.
The earnings before depreciation, interest, tax and adjustments (EBDITA) of 50 companies increased by 22.1 per cent to Rs.15,634 crore from Rs.12,804 crore in the similar half of last year. EBDITA of Suven Life Sciences increased by 386 per cent to Rs.118 crore from Rs.24 crore, Marksans Pharma by 382 per cent to Rs.61 crore from Rs.13 crore and that of Ind-Swift Laboratories moved up by 258 per cent to Rs.73 crore from Rs.21 crore. Piramal Enterprises posted strong growth of 114 per cent to Rs.508 crore and Aurobindo Pharma registered strong growth of over 89 per cent in EBDITA to Rs.755 crore from Rs.399 crore in the last period. Sun Pharma's EBDITA increased by 39.6 per cent to Rs.3,574 crore and that of DRL's increased by 25.6 per cent to Rs.1,382 crore.
The EBDITA of Cadila Healthcare, Jubilant Life Sciences, Wockhardt, Vivimed Labs, Shasun Pharmaceuticals Novartis India, Wyeth, Ind-Swift, Dr Datsons Labs, Parabolic Drugs and TTK Healthcare declined significantly during the first half of 2013-14.
The interest burden of 50 companies increased by 25.3 per cent to Rs.1,740 crore from Rs.1,389 crore in the corresponding half of last year. The interest cost of Piramal Enterprises increased significantly 162 per cent to Rs.550 crore from Rs.210 crore. The interest cost of Cipla, Jubilant Lifesciences, Glenmark Pharma, Nectar Lifesciences, Dishman Pharma and Panacea Biotec increased significantly. However, Sun Pharma, Lupin, Aurobindo, Cadila Healthcare, Wockhardt, Ipca Laboratories, Ajanta Pharma and few others have successfully reduced the interest burden. The depreciation of these 50 companies increased by 16.4 per cent to Rs.2,184 crore from Rs.1,877 crore. The total tax provision of these companies increased only by 4.6 per cent to Rs.2,324 crore from Rs.2,222 crore.
The profit before adjustment and forex loss moved up by 28.3 per cent to Rs.9,386 crore during the first half ended September 2013 from Rs.7,316 crore in the corresponding period of last year. The total adjustment worked out to Rs.2,856 crore as compared to Rs.435 crore in the last period as Sun Pharma has shown adjustment of Rs.2,829 crore towards transfer of domestic formulation undertaking to its wholly owned subsidiary viz., Sun Pharma Laboratories. Similarly, Pfizer has shown adjusted income of Rs.383 crore in the previous year on account of gain through sales of animal division as well as its investments.
Forex loss of these companies increased to Rs.660 crore from Rs.231 crore mainly on account of forex loss of Rs.241 crore and Rs.261 crore incurred by Aurobindo Pharma and Jubilant Lifesciences respectively. Wockhardt and Ipca Laboratories have posted forex loss to Rs.46 crore and Rs.88 crore respectively.
The net profit after taxation, adjustments and forex loss of 50 companies declined by 11.7 per cent to Rs.5,869 crore from Rs.6,650 crore in the same half of last year. Sun Pharmaceutical's net profit after adjustments declined sharply to Rs.86 crore from Rs.1,115 crore. Similarly, the net profit of Wockhardt declined by 44.5 per cent to Rs.462 crore, Nectar Lifesciences by 32 per cent to Rs.26 crore, Vivmed Labs by 29.6 per cent to Rs.36 crore, Pfizer by 69 per cent to Rs.117 crore, Shasun Pharma by 79 per cent to Rs.7 crore and Wyeth by 41 per cent to Rs.41 crore.
Jubilant Lifesciences incurred a net loss of Rs.133 crore as against a net profit of Rs.157 crore and the net loss of Piramal Enterprises increased to Rs.179 crore from Rs.88 crore. Panacea Biotec's net loss increased to Rs.117 crore from Rs.85 crore and that of Parabolic Drugs' net loss went up to Rs.46 crore from Rs.15 crore in the corresponding period of last year. However, DRL, Lupin, Aurobindo Pharma, Granules India, Ajanta Pharma and Suven Life Sciences improved their net profit significantly.
Considering above performance, pharmaceutical companies will manage to generate net sales growth of 13-15 per cent and adjusted net profit growth of around 18-20 per cent during 2013-14 despite price cut of 387 drugs by government or reduction in sales on account of quality problem in US and Europe.
Highlights for 50 cos: First half ended