The 100 leading listed Indian pharmaceutical companies have clocked sluggish growth in bottomline during the year ended 2013-14 on account of regulatory actions by US FDA, implementation of new pricing policy, higher interest burden, staff cost and stiff competition in international as well as domestic market. The consolidated net profit after forex loss and adjustments of Pharmabiz sample of 100 companies improved only to Rs. 16,946 crore from Rs. 16,049 crore in the previous year basically due to setback for leading companies like Ranbaxy Laboratories, Piramal Enterprises, Cipla, Glenmark Pharmaceuticals, Jubilant Life Sciences, Wockhardt, Orchid Chemicals, Pfizer and GlaxoSmithKline Pharma, during 2013-14.
The consolidated net sales of 100 pharma companies, including 10 multinational companies, improved by 15.6 per cent to Rs. 1,61,724 crore from Rs. 1,39,955 crore in the 2012-13 as 19 companies have clocked strong growth of above 25 per cent and 37 companies between 10 to 25 per cent.
Sun Pharmaceutical Industries climbed to No 1 position by posting net sales of Rs. 16,004 crore overtaking Ranbaxy and Dr Reddy's Laboratories (DRL). The net sales of Sun Pharmaceutical went up sharply by 42.4 per cent. DRL maintained its second position with net sales of Rs. 13,217 crore, a growth of 13.7 per cent and Ranbaxy at third position with net sales of Rs. 13,040 crore for 15 months period ended March 2014. Ranbaxy hit by import alert from the US FDA on its manufacturing facility located in Mohali and Toansa. Sun Pharma set to acquire Ranbaxy Laboratories in an all-stock deal valued at US$ 4 billion, which will create new opportunities.
Lupin and Cipla have maintained their ranking at fourth and fifth position with net sales of Rs. 11,087 crore and Rs. 9,035 crore respectively during 2013-14. Aurobindo Pharma moved up to sixth place with net sales of Rs. 8,038 crore, displacing Cadila Healthcare to seventh rank. Cadila registered net sales of Rs. 7,060 crore. Glenmark Pharmaceuticals climbed up to 8 spot, overtaking Wockhardt and Jubilant Life Sciences. Glenmark's net sales improved by 19.4 per cent to Rs. 5,984 crore from Rs. 5,012 crore in the previous year. Wockhardt's net sales declined by 13.9 per cent to Rs. 4,830 crore from Rs. 5,609 crore and its rank went below to tenth spot from eighth in the previous year.
Out of Pharmabiz 100 companies, 33 entities registered net sales of above Rs. 1,000 crore as against 28 in the previous year. Ajanta Pharma, Granules India, Sharon Bio-Medicine, Pfizer and J B Chemicals posted nets sales of above Rs. 1,000 crore. Strides Arcolab achieved net sales of Rs. 1,258 crore for the 15 months period ended March 2014. Ind-Swift Laboratories net sales declined by 15.1 per cent to Rs. 965 crore from Rs. 1,136 crore.
The other operating income of 100 companies increased by 8 per cent to Rs. 2,659 crore from Rs. 2,463 crore and there other income surged by 19.6 per cent to Rs. 2,641 crore from Rs. 2,209 crore. Thus, the aggregate consolidated income i.e. net sales, other operating income and other income, of 100 companies increased by 15.5 per cent to Rs. 1,67,024 crore as against Rs. 1,44,627 crore.
The raw material cost, including stock adjustments and purchases, went up modestly by 11.8 per cent to Rs. 65,969 crore from Rs. 59,021 crore. The staff cost, however, jumped by 22 per cent to Rs. 25,192 crore from Rs. 20,643 crore. Other expenditure increased by 18.5 per cent to Rs. 38,816 crore from Rs. 32,762 crore.
Dr Reddy's Laboratories remained highest spender on staff during 2013-14 at Rs. 3,878 crore as compared to Rs. 3,427 crore in the previous year. Ranbaxy incurred employees expenditure of Rs. 2,577 crore for the 15 months period ended March 2014. This was followed by Sun Pharma at Rs. 2,074 crore, a significant growth of 35.3 per cent. Important players like Piramal Enterprises, Abbott India, Granules India, Shilpa Medicare, SMS Pharmaceutical, Bliss GVS Pharma, etc., pushed there staff spending substantially by over 40 per cent during 2013-14.
Earnings before depreciation, interest, taxation, and forex and other adjustment (EBDITA) of 100 companies improved by 15 per cent to Rs. 37,045 crore from Rs. 32,2001 crore in the previous year. The EBDITA as percentage of net sales worked out to 22.9 per cent as compared to 23 per cent in the previous year. Major companies like, Aurobindo Pharma, Granules India, Sun Pharmaceutical, Lupin, Piramal Enterprises, Alembic Pharmaceuticals, Ajanta Pharma, Elder Pharmaceuticals, Shilpa Medicare, Suven Life Sciences, etc achieved significant growth of over 40 per cent in EBDITA.
However, EBDITA of few pharma players in the Pharmabiz sample viz., Ranbaxy, Cipla, Jubilant Life Sciences, Wockhardt, GlaxoSmithKline, Orchid Chemicals, Nectar Lifesciences, Ind Swift Laboratories, Novartis, Merck, Sterling Biotech, Wyeth, Claris Lifesciences, Panacea Biotec, Dr Datsons Lab (formerly known as Aanjaneya Lifecare), etc., declined and impacted the overall profit performance during 2013-14.
The total depreciation provision amounted to Rs. 6,129 crore during 2013-14 as compared to Rs. 5,223 crore in the previous year. The interest cost went up sharply by 30.2 per cent to Rs. 5,738 crore from Rs. 4,406 crore in the previous year mainly due to significant rise in interest burden of Cipla, Ranbaxy, Piramal Enterprises, Torrent Pharmaceuticals, Plethico Pharmaceuticals orchid Chemicals, Elder Pharmaceuticals, Shasun Pharmaceuticals and Panacea Biotec. Cipla's interest cost went up by 283 per cent to Rs. 127.86 crore from Rs. 33.28 crore and that of Ranbaxy's (for 15 months) moved up by 84 per cent to Rs. 557.26 crore from Rs. 303.60 crore. Piramal Enterprises' interest burden surged by 82.5 per cent to Rs. 1,050 crore from Rs. 575 crore. Similarly, Orchid Chemicals' interest cost touched to Rs. 523 crore for 18 months from Rs. 180 crore.
However, Sun Pharma, Aurobindo Pharma, Dr Reddy's Labs, Lupin, Cadila Healthcare, Wockhardt, Ipca Laboratories, Biocon, Alembic Pharmaceuticals, Ajanta Pharma, Indoco Remedies, Claris Lifesciences, etc., reduced interest burden successfully during 2013-14.
The taxation cost of 100 companies went up by 16.5 per cent to Rs. 6,038 crore from Rs. 5,185 crore in the previous year. The net profit before adjustments and forex loss moved up by 10.1 per cent to Rs. 19,141 crore from Rs. 17,387 crore. The forex loss declined by 25.7 per cent to Rs. 342 crore from Rs. 460 crore. However, other adjustments jumped up by 111 per cent to Rs. 1,852 crore from Rs. 879 crore in the previous year impacting bottom line growth. The equity capital of 100 companies reached at Rs. 3,084 crore and there reserves & surplus increased by 9.7 per cent to Rs. 1,09,457 crore from Rs. 99,814 crore.
Indian pharma companies are investing funds in research and development to tap new opportunities upcoming form patent expiration. Sun Pharma's R&D expenditure touched to Rs. 1,042 crore and worked out to 6.5 per cent of its total sales. It received total 344 ANDAs approvals and 134 ANDAs awaits US FDA approval as at the end of March 2014. It submitted 573 patent applications and granted 346 patents. It targeted 25 ANDAs in current year.
Similarly, Dr Reddy's Laboratories incurred R&D expenditure of Rs. 1240 crore, a growth of 62 per cent and it worked out to 9.4 per cent of its sales. The company launched 54 new generic products and filed 51 new product registrations. It filed 61 DMFs globally during 2013-14. Ranbaxy's R&D expenditure for the 15 months period ended March 2014 reached at Rs. 528 crore as against Rs. 449 crore in the previous year. Aurobindo's cumulative filings of ANDAs and DMFs reached at 336 and 181 during 2013-14. Lupin's revenue expenditure on R&D went up to Rs. 929 crore from Rs. 710 crore in the previous year. Its R&D expenditure as percentage of net sales worked out to 8.4 per cent. It filed 19 ANDAs and received 22 approvals. Its cumulative ANDA filings stood at 192 and received total 99 approvals as at the end of March 2014. Besides these companies several other companies like Glenmark, Biocon, Jubilant Life Sciences, Wockhardt, Strides, Cadila Healthcare stepped up their R&D expenditure during 2013-14.
The Pharmabiz sample included 10 multinational companies, including Ranbaxy Laboratories, listed on Indian stock exchanges. The net sales of these 10 companies viz., Ranbaxy Laboratories, GlaxoSmithKline Pharma (GSK), Abbott India, Sanofi India, Pfizer, Novartis India, Merck, Wyeth, AstraZeneca Pharma and Fulford (India) increased only by 8.3 per cent to Rs. 23,529 crore from Rs. 21,718 crore in the previous year. This worked out to almost 15 per cent of net sales of Pharmabiz sample of 100 pharma companies.
The EBDITA of these 10 MNCs declined sharply by 24.4 per cent to Rs. 3,417 crore from Rs. 4,521 crore on account of lower EBDITA by Ranbaxy, GSK, Novartis, Merck, Wyeth and AstraZeneca Pharma during 2013-14. Ranbaxy's EBDITA declined by 44 per cent to Rs. 1,241 crore from Rs. 2,211 crore and that of GSK moved down by 28.6 per cent to Rs. 723 crore. However, Abbott India, Sanofi India and Pfizer perform well during the year.
The 100 companies have declared handsome equity dividend during 2013-14. Piramal Enterprises declared total dividend of 2,625 per cent followed by Divi's Laboratories 1000 per cent, Pfizer 3600 per cent and Wyeth 1450 per cent. GSK declared equity dividend of 500 per cent and Sanofi announced 450 per cent. Unichem Laboratories also declared hefty dividend of 400 per cent and Dr Reddy's Laboratories of 360 per cent. Further, Lupin, Aurobindo Pharma and Jubilant Life Sciences announced dividend of 300 per cent. Sun Pharma issued bonus shares in the ratio of 1:1 and its equity capital increased to Rs. 207 crore from Rs. 104 crore.
Growth in sales and profit of 100 cos