A Pharmabiz study of 30 leading pharmaceutical companies, with consolidated net sales above Rs. 600 crore during first nine months of 2015-16, exhibited a sales growth of 9.6 per cent and net profit growth of 6.4 per cent. Based on these figures, the overall financial performance will be under pressure during 2015-16 as compared to last couple of years. The sales and profit may move up in the range of 10-12 per cent in the current year. The overall growth will be restricted due to the US FDA actions, competition and higher overheads. The Pharmabiz sample of 30 companies contributed over 80 per cent to total net sales of 100 leading companies in 2014-15.
The net sales of 30 companies increased by 9.6 per cent to Rs. 1,19,493 crore during the nine months ended December 2015 from Rs. 1,08,996 crore in the corresponding period of last year. Other operating income went up sharply by 58 per cent to Rs. 2,089 crore from Rs. 1,323 crore and other income moved up by 30.9 per cent to Rs. 2,095 crore from Rs. 1,600 crore. Thus, the total income of 30 companies increased by 10.5 per cent to Rs. 1,23,677 crore from Rs. 1,11,919 crore.
The sample of 30 companies have not included few companies like Sanofi India, Orchid Pharma, Aarti Drugs, Abbott India, Sharon Bio, Strides Shasun and Elder Pharma due to different set of year ending or lower sales. Alkem Laboratories and Syngene International included in this study for the first time as these two companies entered capital market during December and August 2015 respectively.
The raw material cost, including purchases and stock adjustments, increased only by 3.3 per cent to Rs. 38,945 crore from Rs. 37,683 crore. Employees cost increased by 14.8 per cent to Rs. 20,364 crore from Rs. 17,742 crore and other expenditure increased by 10.4 per cent to Rs. 32,120 crore. Their total expenditure increased by 8.2 per cent to Rs. 91,429 crore from Rs. 84,519 crore. The earnings before depreciation, interest, tax and adjustments (EDBITA) improved by 17.7 per cent to Rs. 32,248 crore from Rs. 27,400 crore.
The provision for depreciation of 30 companies increased by 7.9 per cent to Rs. 4,517 crore from Rs. 4,187 crore in the similar nine months of last year and their interest cost went up by 21.7 per cent to Rs. 2,319 crore from Rs. 1,906 crore. The interest burden of Lupin, Wockhardt and Piriamal Enterprises went up by over 50 per cent during first nine months. However, several companies like Sun Pharma, Dr Reddy's Laboratories, Cadila Healthcare, Glenmark Pharma, Alkem Laboratories, Divi's Laboratories, Pfizer, Nectar Lifesciences, Ajanta Pharma Marksans Pharma, Hikal, etc, managed to reduce their interest burden.
Tax provision of these 30 companies increased only by 6.1 per cent to Rs. 5,987 crore from Rs. 5,644 crore and their profit before adjustments increased by 24 per cent to Rs. 19,425 crore from Rs. 15,663 crore. The net profit before adjustments of Cipla, Torrent Pharma, Alkem Laboratories, Alembic Pharmaceuticals, Dishman Pharma, J B Chemicals, Novartis India, etc., moved up sharply by over 50 per cent during the first nine months of current year. Similarly, Cadila Healthcare, Vivimed Laboratories, Syngene International Granules India, Ajanta Pharma, Divi's Laboratories, Aurobindo Pharma and Glenmark Pharma registered growth of above 20 per cent in net profit before adjustments.
Among leading 30 pharma companies, Cipla, Torrent Pharmaceuticals, Alkem Laboratories, Alembic Pharmaceuticals, Piramal Enterprises, Syngene International and Natco Pharma registered net sales growth of above 20 per cent during first nine months ended December 2015. Further, Aurobindo Pharma, Cadila Healthcare, Divi's Laboratories, Ajanta Pharma, Granules India and FDC Ltd notched up sales growth of over 10 per cent. The net sales of Sun Pharmaceutical, Jubilant Life Sciences, Ipca Laboratories, Nectar Lifesciences, Vivimed Laboratories, Hikal and Novartis India declined during the first nine months.
The net sales of Dr Reddy's Laboratories, Glenmark Pharmaceuticals, Wockhardt, Biocon, Pfizer, Dishman Pharmaceuticals, J B Chemicals and Marksans Pharma improved only by single digit. Lupin and GlaxoSmithKline Pharma managed net sales growth of only 0.7 per cent and 0.1 per cent.
India's largest pharma company, Sun Pharma's net sales declined by 3.8 per cent to Rs. 20,376 crore and that of second largest pharma company, Dr Reddy's Laboratories improved by 7 per cent to Rs. 11,715 crore from Rs. 10,948 crore. Both these companies are facing US FDA action in respect of quality of products. Cipla's net sales improved to Rs. 10,166 crore from Rs. 7,902 crore.
The net profit before adjustments (PBA) of Lupin declined by 22.1 per cent to Rs. 1,467 crore from Rs. 1,884 crore and that of Wockhardts moved down by 34.9 per cent to Rs. 298 crore from Rs. 458 crore. Ipca Laboratories also suffered heavy setback and its PBA declined by 65 per cent to Rs. 90 crore from Rs. 258 crore and that of Glaxo's net declined by 11.2 per cent to Rs. 283 crore.
Financial Highlights for 30 Cos