After achieving better performance during the year 2005-06 and quarter ended June 2006, the Indian pharmaceutical companies once again managed to push sales as well as profit levels in the quarter ended September 2006. Several companies, large and medium size, performed well as compared to similar period of last year. Despite stiff competition in the international field, higher spending on selling and administration, spurt in R&D activities, and investments in mergers & acquisitions, several Indian companies achieved better growth rates and improved there earning per share in the quarter under review.

PHARMABIZ has selected some important gainers and losers among the 75 companies, which has significant impact on the overall working of the sample. The companies have year ended in month of December or March and accordingly, the financial working covered for the second or third quarter. Further, a few companies have announced only consolidated figures by including subsidiaries. MNCs' working is under pressure as they reduced their fixed assets during last couple of quarters and also demerged unrelated activities.

Ranbaxy Labs: Healthy growth in bottom line
Ranbaxy Laboratories, a leading pharmaceutical company in India, achieved impressive financial performance during the third quarter and first nine months of the year 2006. The company's consolidated sales for the third quarter increased by 25.8 per cent to Rs 1640 crore from Rs 1304 crore in the corresponding period of last year. The profit before interest, depreciation, tax and amortization moved up sharply to Rs 270 crore from Rs 42.70 crore in the last period. Its net profit has taken a quantum jump of over 650 per cent and touched to Rs 140.4 crore from Rs 18.7 crore. Earning per share on fully diluted basis improved to Rs 3.37 from Rs 0.49. in the last period.

Commenting on the financial performance, Malvinder Mohan Singh, CEO and MD, said, "We have improved our performance in each successive quarter over the last nine months. This can be attributed in large measure to the growth being driven in some of our key geographies and efficiencies gained from sustained cost containment measures. We will continue to maintain this momentum and press ahead in delivering future growth across geographies, in line with our guidance."

Ranbaxy's global sales in third quarter increased by 23 per cent to US$ 354 million. The growth was led by sales in key geographies of the USA and the BRICS markets, which recorded an increase of 32 per cent over the corresponding period of last year. This includes the full quarter financials of the recently acquired Romanian business of Terapia S. A. International dosage forms sales at $ 250 million registered a growth of 35 per cent and presently contribute 71 per cent to total sales.

The India region continued to perform well recording sales of $ 79 million, a growth of 13 per cent. In rupee terms sales stood at Rs 364 crore for the third quarter ended September 2006, a growth of 20 per cent.

Dr Reddy's net zooms by 154% in Q2
Dr Reddy's Laboratories (DRL), the third largest Indian pharma company with sales above Rs 2000 crore, has exhibited impressive performance during the second quarter ended September 2006 basically due to acquisition of Betapharm Group, a leading generics pharmaceuticals company in Germany during March 2006. DRL's net profit went up by 153.5 per cent to Rs 272.66 crore during the latest quarter from Rs 107.54 crore in the corresponding period of last year. The net sales increased by 61.1 per cent to Rs 836.45 crore from Rs 519.27 crore. The earning per share, on an enhance equity capital, worked out to Rs 17.76 as against Rs 14.05 in the similar period of last year.

DRL received license fees and service income of Rs 91.91 crore and its other income amounted to Rs 20.60 crore. Its R&D expenditure reached at Rs 40.68 crore during the quarter under review.

The consolidated net profit touched to Rs 292.50 crore for the quarter ended September 2006 from Rs 90.91 crore in the same period of last year. Total income reached at Rs 1982.60 crore from Rs 584.68 crore. The consolidated results of the current quarter include the results of he acquisitions and are therefore not strictly comparable with the previous period.

Glenmark Pharmaceuticals, a research-led, global, fully integrated pharmaceutical company, posted excellent financial performance during the second quarter and first half of 2006-07. The company's standalone net profit has taken a quantum jump of 131.4 per cent to Rs 32.05 crore from Rs 13.85 crore in the corresponding quarter of last year. Its net sales also increased smartly by 56.3 per cent to Rs 196.35 crore from Rs 125.59 crore. The significant jump in profit assisted its EPS to reach at Rs 2.67 as against Rs 1.13 in the last period.

Glenn Saldanha, managing director and CEO, said, " Our performance in Q2 has effectively demonstrated our commitment to grow our branded generics and generics business globally. The Merck KgaA deal for GRC 8200 has further reinforced Glenmark's commitment and competency in the arena of new drug discovery."

Glenmark's US business earned revenues of Rs 33.80 crore, registering an exponential growth of over 460 per cent over the second quarter of the previous year. The company's Latin American operations, comprising Glenmark Pharmaceutical Ltd and Servycal SA, posted revenues of Rs 26.83 crore, reflecting an increased of 163 per cent. Exports of branded formulations brought in revenue of Rs 52.51 crore, and a growth of 81.5 per cent over the last year. Revenues from the Indian formulations segment registered an increased of 32.2 per cent to Rs 110.83 crore. The company's API business for the quarter registered a growth in revenues by 23 per cent to Rs 31.72 crore.

The company's standalone net profit for the first half ended September 2006 increased by 68.7 per cent to Rs 42.07 crore from Rs 24.94 crore in the similar period of last year. Its net sales for the first half moved up by 39 per cent to Rs 325.98 crore from Rs 234.52 crore in the last period. The raw material cost increased by 82.8 per cent to Rs 125.133 crore and staff cost went up 28.4 per cent to Rs 45.87 crore. The company's interest burden shoot up by 208 per cent to Rs 8.20 crore during the first half.

Torrent Pharmaceuticals (TPL), the Ahmedabad-based pharma major, achieved net profit growth of 35 per cent during the second quarter ended September 2006 to Rs 23 crore from Rs 17 crore in the corresponding period of last year. Its consolidated sales increased by 24 per cent to Rs 322 crore from Rs 259 crore. This was driven by a strong growth of 33 per cent in domestic business and 20 per cent in the international business driven by Brazil and Russia. PBDIT for the second quarter went up by 19 per cent to clock Rs 36 crore from Rs 31 crore in the corresponding period last year riding on the back of improved profitability from domestic and Brazil business.

Torrent's domestic business recorded a jump of 22 per cent in sales to Rs 300 crore during the first half of the fiscal. The segment grew 33 per cent adjusting for sales gain in Q1 on account of implementation of VAT. The divisionalisation and segmentation strategy adopted by Torrent to improve doctor targeting & coverage is expected to maintain the growth momentum.

Consolidated international sales grew by 51 per cent for the period, from Rs 172 crore to Rs 259 crore. This includes Rs 107 crore (Rs 51 crore in the corresponding period last year) pertaining to Heumann Pharma GmbH & Co. Generika KG, Germany (Heumann), which was acquired in July 2005. Robust sales growth of 41per cent was seen in Brazil with top line moving up from Rs 57 crore to Rs 80 crore. Russian market (including the CIS countries) delivered a noticeable performance with sales moving up from Rs 15 crore to Rs 26 crore, a growth of 66 per cent.

For the second quarter of 2006-07, Heumann operations registered flat sales of Rs 51 crore affected by structural changes in the industry on account of ongoing health care reforms. Higher losses were registered due to price erosion in base business and lower sales due to reduction of pipeline stock levels by pharmacies and wholesalers.

During the period the company also entered into an agreement with Chinese drug major Tasly to exclusively market their blockbuster, Cardio-tonic, in India. The USFDA-approved drug has sales of USD 360 million globally with USD 30 million in USA alone, besides being the highest selling single medicine in China, with sales of over USD 160 million. This is a first of its kind in-licensing deal in India.

Aurobindo: Impressive improvement
Aurobindo Pharma, a Rs 1472 crore Hyderabad based pharma giant, achieved excellent growth in net profit during the second quarter ended September 2006. Its net profit jumped to Rs 54.64 crore from Rs 3.64 crore in the corresponding period of last year. The company's net sales moved up by 50.2 per cent to Rs 480 crore from Rs 319.48 crore. With smart improvement in profitability, its earning per share went up to Rs 10.25 from Rs 0.69 in the last period.

The company's other income increased to Rs 26.70 crore from Rs 7.62 crore, a growth of more than 250 percent. The consumption of raw material went up to Rs 254.17 crore from Rs 201.17 crore and its staff cost went up by 54.2 per cent to Rs 28.81 crore from Rs 18.68 crore in the corresponding period of last year.

The company has acquired US FDA compliant cGMP facility in Dayton, New Jersey during the quarter under review. Further, the formulation manufacturing facility situated at Bacchupally village, Ranga Reddy District (Unit III) has been converted into 100% EOU from July 2006.

Exports booster for Cadila Healthcare
Cadila Healthcare, an Ahmedabad based pharma giant, put up good show during the second quarter ended September 2006 with significant growth in exports of formulations and APIs. Its standalone net profit went up by 26.4 per to Rs 65.50 crore from Rs 51.80 ccrore in the corresponding period of last year. Similarly, its net sales improved by 17.1 per cent to Rs 382 crore from Rs 326.10 crore.

The earning per share, after considering a rise in equity capital resulted from bonus issue, for the quarter worked out to Rs 5.21 as compared to Rs 8.25 in the lat period. The company has allotted fully paid equity shares of Rs 5 each as bonus shares in the ratio of 1:1 on September 5, 2006 and its equity capital increased to Rs 62.80 crore from Rs 31.40 crore in the last period.

Cadila's operating profit before interest, depreciation, taxation and extra-ordinary items increased by 16.7 per cent to Rs 94.40 crore from Rs 80.90 crore in the similar quarter of the last year. It received approval for two more ANDA by USFDA during the quarter under review.

During the quarter, its subsidiaries in France and US registered a strong performance. Zydus France SAS, which currently market over 85 generic presentations, registered 87 per cent growth in sales for the quarter. The company filed 6 addition site transfer applications with the French regulatory authority AFSSAPS, in this quarter.

Cadila's US based subsidiary pushed its sales by 352 per cent. The group filed 5 additional DMFs during the quarter taking the total to 41 ANDA filings and 45 DMFs. It received approval for Meloxicam tablets taking the cumulative approvals to 17, of which 7 products have been launched so far. Cadila has incorporated a subsidiary in Japan to market generic formulations and API in the Japanese market. The product registration process is expected to begin in 2007. It signed three more contracts this quarter for contract manufacturing with international companies, taking the cumulative number of contracts signed to 17 with peak revenue potential of US $ 25.5 million. It launched Novolizer, a device for Asthma and COPD.

Wockhardt: Gaining strength from overseas biz
Wockhardt Ltd achieved satisfactory performance during the third quarter ended September 2006 on account of higher sales in domestic as well as international market. Its consolidated net profit went up by 13.7 per cent to Rs 74 crore from Rs 65.1 crore in the corresponding period of last year. The company's net sales increased by 21.8 per cent to Rs 437.7 crore from Rs 359.5 crore.

During the quarter under review, Wockhardt acquired two companies, Dumex India in domestic area and Pinewood in Ireland.Dumex acquisition strengthened Wockhardt's nutrition portfolio by doubling it, with two prestigious brands of Protinex and Farex which enjoy a significant brand equity. Integration of this business is underway with manufacturing rationalization and organization integration.

Its US formulation business achieved a growth of 21 per cent to Rs 54.30 crore during the third quarter ended September 2006 from Rs 45.4 crore in last period. The company received approvals for 6 ANDAs and two new facilities. So far it received US FDA approval for its six facilities. Its European business improved by 10 per cent to Rs 149.1 crore from Rs 135.8 crore in the corresponding quarter of last year.

The focus on therapeutic areas of diabetology and nephrology has shown a robust growth of 37 per cent and 43 per cent respectively. These were aided by a strong biotechnology programme with Wepox registering a growth of 27 per cent and Wosulin market share in the devices market increased to 7 per cent from 3 per cent in August 2006.

Matrix Labs suffers setback
Matrix Laboratories suffered heavy setback during the second quarter ended September 2006 on account of significant lower exports, higher staff cost, enhanced R&D expenditure and spurt in interest burden. The company's consolidated net profit declined sharply by 63.7 per cent to Rs 15.86 crore from Rs 43.70 crore in the corresponding period of last year. Though its consolidated net sales moved up by 28 per cent to Rs 373.18 crore, its staff cost went up by 77.6 per cent, other expenditure by 38.6 per cent and R&D expenditure by 154 per cent during the quarter under review. With major fall in profits, its EPS nose-dived to Rs 1.03 as compared to Rs 2.92. The consolidated results include working of subsidiaries and recently acquired Docpharma NV figures.

The pharmaceutical sales improved to Rs 341.40 crore as against Rs 243.28 crore in the same quarter of last year. Its sales from medical supplies also increased to Rs 52.55 crore from Rs 48.30 crore. The profit before R&D expenditure, interest, depreciation and taxation went down by 2.9 per cent to Rs 69.77 crore from Rs 71.87 crore in the similar period of last year. The interest burden increased to Rs 19.45 crore from Rs 2.77 in the previous period and depreciation provision increased to Rs 12.83 crore as against Rs 8.45 crore. R&D expenditure moved up to Rs 22.63 crore from Rs 8.90 crore.

The company's standalone net sales and net profit for the quarter declined by 18.3 per cent and 68.6 per cent respectively to Rs 142.53 crore and Rs 9.61 crore. Its exports sales came down sharply by 35.2 per cent to rs 58.36 crore from Rs 90 crore and domestic sales declined slightly by 0.1 per cent to Rs 84.18 crore. The net profit went down to Rs 9.61 crore from Rs 30.65 crore. For the first six months of 2005-06, its standalone net profit declined by 31 per cent and Rs 38.58 crore, despite its net sales improved marginally by 2.4 per cent to Rs 336.66 crore.

Lowered sales hit Ind-Swift Labs hard
Ind-Swift Laboratories, a Rs 325 crore Chandigarh based pharma company, suffered heavy setback during the second quarter and first half ended September 2006 due to lower sales in the domestic market. Its net profit for the second quarter declined by 45.6 per cent to Rs 4.50 crore from Rs 8.27 crore in the corresponding period of last year. The company's net sales also declined by 9.2 per cent to Rs 72.88 crore from Rs 80.28 crore. Its exports increased by 21 per cent during the second quarter of 2006-07.

The company achieved net sales of Rs 323.42 crore for the full year ended March 2006 and earned a net profit of Rs 34.79 crore. Considering the performance during the quarter ended in September, it is unlikely that the company will able to maintain its profitability in current year.

RPG Life Sciences: Net falls 49%
RPG Life Sciences received setback during the second quarter ended September 2006 despite lower interest and depreciation provisions. Its net profit dwindled to Rs 3.06 crore from Rs 5.97 crore in the corresponding period of last year, a fall of 48.7 per cent. The net sales also declined by 7.6 per cent to Rs 33.45 crore from Rs 36.22 crore in the last period. With the fall in profits, its EPS nose-dived to Rs 2.13 from Rs 4.80.

For the first six months period ended September 2006, its net profit declined by 48.6 per cent to Rs 6.43 crore from Rs 12.52 crore in the similar six months of last year. Its net sales came down heavily by 20.4 per cent to Rs 63.58 crore from Rs 79.84 crore. The company has provided for the liability arising out of termination of lease arrangement with Hindustan Antibiotics Ltd for its plant and equipment at Pune. It has to make further provision of Rs 1.62 crore for termination of this agreement. The company recorded net sales of Rs 144.30 crore and earned a net profit of Rs 19.68 crore during the year ended March 2006.

Payouts take sheen of Alembic
Alembic Ltd, an integrated pharmaceutical company with manufacturing facilities in Vadodarra and Baddi, suffered heavy setback during the second quarter ended September 2006 mainly due to one time payment towards past interest to ONGC and VRS programme. The company's net profit declined sharply by 38 per cent to Rs 16.28 crore from Rs 26.68 crore in the corresponding period of last year. The company provided Rs 15.32 crore for payment of interest to ONGC and VRS. With fall in profits, its earning per share worked out to Rs 5.88 as compared to Rs 9.64 in the last period. The company's net sales for the quarter improved only by 8.4 per cent to Rs 203.87 crore from Rs 188.14 crore in the similar period of last year. Its exports increased marginally to Rs 35.73 crore from Rs 34.61 crore.

Stride Arcolab: Hurt by adverse forex impact
Stride Arcolab suffered heavy setback during the third quarter ended September 2006 due to adverse forex impact, increase in R&D expenditure and lower output at US plant. The company's standalone net profit declined sharply by 39.1 per cent to Rs 8.93 crore from Rs 14.67 crore during the corresponding period of last year. Its net sales, however, moved up by 32.8 per cent to Rs 117.82 crore from Rs 88.72 crore. With sharp fall in profits, its earning per share nose-dived to Rs 2.31 from Rs 3.97 in the previous period.

Commenting on the results, Arun Kumar, vice chairman and Group CEO, said, "The financial performance for Q3 shows a significant upswing in our core businesses while challenges identified in the earlier guidance are being addressed. The capacity constraints have since been addressed and the company has geared up significantly to meet increasing demand from its Oral Dosage Form facilities."

Its consolidated sales increased to Rs 182.6 crore during the quarter ended September 2006 from 138.70 crore , 32 per cent up over corresponding period. The company received two ANDA approvals for Stavudine and Nevirapine under the expedited review provisions of the President's Emergency Plan for Aids Relief program from the USFDA. The company filed 10 ANDA/NDA's with USFDA during quarter ended September taking its total filings with USFDA to 21.

GlaxoSmithKline Pharmaceuticals (GSK), a leading MNC in India with gross sales of Rs 1575 crore, suffered minor setback during third quarter ended September 2006 mainly on account of the divestment of the Animal Health business. The company's net profit after exceptional items declined by 7.7 per cent to Rs 285.43 crore from Rs 309.33 crore in the corresponding period of last year. Its net sales also moved down by 5.1 per cent to Rs 399.15 crore from Rs 420.66 crore. With fall in profits, its earnings per share nosedived to Rs 33.7 from Rs 36.5 in the last period.

The company's pharmaceutical sales increased only by 2.3 per cent to Rs 369.14 crore from Rs 360.82 crore during third quarter of 2005, but sales of of other business of veterinary formulations, feed supplements, etc., declined sharply by 41.6 per cent to Rs 40.06 crore from Rs 68.60 crore.

GSK's other income increased by 32 per cent to Rs 16.10 crore from Rs 12.20 crore and its interest income went up to Rs 9.26 crore from Rs 5.55 crore. With significant growth in other income and interest, its profit before taxation and exceptional items improved marginally by 2 per cent to Rs 149.56 crore from Rs 146.68 crore in the corresponding quarter of last year. The company shown exceptional items of Rs 186.36 crore during the quarter under review as compared to Rs 214.42 crore. The company sold its Animal Health business as a going concern to Virbac Animal Health India Pvt Ltd for a total consideration of Rs 207.10 crore.

Sell-offs pulls Merck's net down by 15.8%
Merck Ltd, a part of Merck KgaA, Germany, has received set back during the quarter ended September 2006 mainly due to sale of Life Science and Analytics Business in the second quarter of current year. The net profit declined by 15.8 per cent to Rs 18.98 crore from Rs 22.53 crore in the corresponding period of last year. Its net sales declined by 26.2 per cent to Rs 78.37 crore from Rs 106.21 crore, which includes figures of Life Science and Analytics business. Thus the figures are not strictly comparable.

Though the pharmaceutical segment improved its net sales by 2.9 per cent to Rs 65.41 crore in the quarter under review, the net sales of Chemicals division declined sharply by 67.3 per cent to Rs 14.64 core from Rs 44.81 crore.

Novartis net slides by 35.1% in Q2
Novartis India suffered heavy setback during the second quarter ended September 2006 basically due to selling of its assets during the last period. Its net profit declined sharply over 35 per cent to Rs 17.87 crore from Rs 27.53 crore. Its net sales also dwindled by 11.5 per cent to Rs 138.25 crore from Rs 156.20 crore.

During the last period ended September 2005, Novartis has shown an amount of Rs 26.8 crore as profit on sale of assets and insurance claims. This resulted in higher net profit during the last period.With lower net profit its earning per share worked out to Rs 5.59 as compared to Rs 8.61 in the similar period of last year.