The pharmaceutical players in Maharashtra are moving ahead strongly with entry into new markets, launching new products, R&D investments, filing more numbers of ANDAs and DMFs in highly regulated market. Though the competition and quality problems are impacting the short -term working, the long- term outlook seems to be positive. Out of 100 listed Pharmabiz entities, the Maharashtra- based players are controlling a major portion of 41 per cent of aggregate net sales on account of higher international as well as domestic presence.

For the first quarter ended June 2014, major companies like Lupin, Glenmark Pharmaceutical, Ipca Laboratories and Indoco Remedies registered strong growth in revenues and profits. However, Pfizer, Novartis and Unichem Laboratories failed to generate higher growth in the first quarter of 2014-15.

The financial performance of 50 companies was under pressure during the year ended March 2014 and there net sales improved only by 10.6 per cent to Rs 65,920 crore from Rs 59,586 crore in the previous year due to stiff competition and US FDA regulatory stricture regarding quality problems. Further, lower returns on R&D expenditure and interest burden put pressure on bottom line. Despite challenges in domestic and international markets, these pharma players offer better return to investors in the form of dividend as well as improved market capitalisation.

Out of 50 major listed pharmaceutical companies having registered office in Maharashtra, 16 companies registered net sales of above Rs 1,000 crore during 2013-14 as compared to 11 companies in the 2012-13. Strides Arcolab (for 15 months period), Ajanta Pharma, Sharon Bio-Medicine, Pfizer and J B Chemicals entered the list for the first time with net sales above Rs 1,000 crore. There were eight multinational companies like GlaxoSmithKline Pharma (GSK), Abbott India, Sanofi India, Pfizer, Novartis India, Merck, Wyeth and Fulford (India). The net sales of 13 companies from the sample declined during 2013-14 which includes major companies like Wockhardt, GlaxoSmithKline Pharma, and Novartis.

Lupin remained on top with net sales growth of 17.2 per cent to Rs 11,087 crore followed by Cipla Rs 9,035 crore, Glenmark Pharma Rs 5,983 crore, Wockhardt Rs 4,831 crore and Piramal Enterprises Rs 4,464 crore during 2013-14. Lupin, Ipca Laboratories, Sanofi India, Ajanta Pharma, Hikal, Indoco Remedies and Vinati Organic registered impressive growth in profit before adjustment during 2013-14. Similarly, relatively small companies like Kopran, Anuh Pharma, RPG Life Sciences, Aarey Drugs, Syncom Formulations, DIL etc registered significant growth in bottom line.

The earnings before depreciation, interest, taxation and adjustments (EBDITA) of 50 companies improved only by 3.6 per cent to Rs 14,514 crore during 2013-14 from Rs 14,005 crore in the previous year as Cipla, Wockhardt, GSK, Novartis, Merck, Sterling Biotech, Wyeth, Amar Remedies, Dr Datsons Labs, Bliss GVS Pharma, RPG Life Sciences, Syncom Healthcare, Twilight Litaka Pharma, etc., suffered major setback during 2013-14. The EBDITA of Cipla declined by 3.3 per cent to Rs 2,270 crore from Rs 2,348 crore and that of Wockhardt declined sharply by 52.5 per cent to Rs 1,018 crore from Rs 2,142 crore. GSK's EBDITA declined by 28.6 per cent to Rs 723 crore and that of Novartis moved down by 45.8 per cent to Rs 94 crore. Merck and Sterling Biotec registered fall in EBDITA of 21.8 per cent and 36 per cent respectively.

The depreciation provision of 50 companies increased by 9.8 per cent to Rs 2,281 crore from Rs 2,077 crore and there interest cost went up by 25.6 per cent to Rs 2,733 crore from Rs 2,173 crore. The taxation figure went up by 18.5 per cent to Rs 3,042 crore from Rs 2,568 crore. The net profit after tax, but before adjustments, of 50 companies declined by 10.1 per cent to Rs 6,457 crore during 2013-14 from Rs 7,184 crore in the previous year.

The total adjustment figure of 50 companies worked out to income of Rs 1,960 crore as against Rs 345 in the previous year and forex loss reached at Rs 44.97 crore as compared to Rs 147.13 crore in the previous year. These adjustments inflated the net profit of these companies. For instance, Strides Arcolab has shown a adjusted income of Rs 2,206 crore followed by Wockhardt Rs 47.78 crore, GSK Rs 26.15 crore, Sanofi India Rs 25.40 crore, Unichem Rs 49.01 crore, RPG Life Sciences Rs 64.14 crore and Parenteral Drugs Rs 54.64 crore. Wockhardt has shown forex gain of Rs 45.88 crore as compared to forex loss of Rs 27.88 crore and Hikal has reduced forex loss to Rs 17.92 crore from Rs 48.43 crore. This has reduced overall forex loss of 50 companies during 2013-14.

The net profit was under pressure mainly on account of significant growth in net loss of Piramal Enterprises to the tune of Rs 501 crore, followed by Sterling Biotech Rs 400 crore, Sequent Scientific Rs 110 crore, Twilight Litaka Pharma Rs 171 crore, Avon Organics Rs 34.82 crore. Further, the net profit of Cipla, Glenmark Pharma, Wockhardt, GSK Pfizer, JB Chemicals declined sharply during 2013-14 which put pressure on overall growth of bottom line.

Several companies are investing in R&D to tap future opportunities in international market with expiration of patent. Lupin's revenue R&D expenditure increased by 30 per cent to Rs 929 crore from Rs 710 crore in the previous year and worked out to 8.4 per cent of net sales as against 7.5 per cent in the last year. It filed 19 ANDAs and received 22 approvals. Cumulative ANDA filings with the UF FDA stood at 192 and approvals reached at 99 ANDAs. It has 31 first-to-files include 15 exclusive ones. Further, cumulative filings with European authorities now stand at 57 with the company having received 48 approvals.

Wockhardt's R&D expenditure amounted to Rs 403 as against Rs 313 crore in the previous year, a growth of 28.8 per cent, and worked out to 8.3 per cent of sales. The company filed 17 new products in US.

Ajanta filed one more ANDA during the fourth quarter taking total tally to 23 ANDAs, with two approved and 21 awaiting approval. R&D expenditure reached at Rs 50 crore during 2013-14 from Rs 37 crore in the previous year. This worked out to 4.5 per cent of revenues. Glenmark received approval for eight ANDAs, comprising seven final approval and one tentative approval. In the fourth quarter ended march 2014, Glenmark filed seven ANDAs with the US FDA and plans to file additional 10 applications in the first quarter of the 2014-15.