The eight multinational pharmaceutical companies operating in India with year ending during November-December 2005 posted mixed trend in respect of profitability. Although the net profit of these companies has taken a jump of 22.1 per cent, thanks to extra-ordinary items, the profit before interest, depreciation taxation and other adjustment improved only by 9.3 per cent.

AstraZeneca Pharma, GSK and Pfizer announced strong performance, but Aventis Pharma, Abbott India and Solvay Pharma failed to generate positive growth and put pressure on aggregate working of MNCs in 2005.

The net sales of eight MNCs viz., Abbott India, AstraZeneca Pharma, Aventis Pharma, Fulford (India), GlaxoSmithKline Pharma, Merck, Pfizer, Solvay Pharma increased only by 9 per cent to Rs 4233 crore during the year 2005 from Rs 3885 crore in the previous year. Another two MNCs i.e. Novartis India and Wyeth are ending their years in March and not taken in sample. Out of eight MNCs, AstraZeneca, Fulford (India) and Solvay Pharma achieved double-digit growth in net sales during 2005. GSK maintained its leadership position among MNCs in India with net sales of Rs 1485 crore, a rise of 8 per cent. Aventis remained at second spot with net sales of Rs 808 crore. Pfizer notched up net sales growth of 7.3 per cent during 2005 and its net sales touched to Rs 599 crore.

The other income of eight MNCs declined to Rs 184 crore during 2005 from Rs 196 core in the previous year. The raw material cost reached at 1965 crore against Rs 1724 crore. The staff cost increased by 12.1 per cent to Rs 456 crore from Rs 407 crore. The cost cutting measures restricted other expenditure to Rs 836 crore as against Rs 795 crore. The interest cost came down to Rs 0.33 crore from Rs 1.91 crore and depreciation provision remained almost at same amount at Rs 69 crore. Though the MNCs managed to control expenditure, the meager rise in net sales and lower other income impacted the growth of EBDIT and PBT during 2005. The profit before tax improved only by 9.8 per cent to Rs 1169 crore during 2005 from Rs 1064 crore in the previous year.

The huge amount of extra-ordinary income regarding sale of two properties in Mumbai for Rs 196 crore by GSK and exceptional expenditure in respect of amortization of compensation to employees of Rs 23.37 crore impacted the aggregate net profit positively by almost 22.1 per cent to Rs 929.57 crore during 2005 from Rs 761.23 crore in the previous year.

MNCs are rewarding their parent companies as well as investors handsomely. With strong performance, GSK stepped up its dividend to 280 per cent during 2005 as compared to 240 per cent in the last year. Merck Ltd, Solvay Pharma and Fulford steped equity dividend to 150 per cent, 60 per cent and 30 per cent respectively. Aventis and Pfizer maintained equity dividend at 160 per cent and 100 per cent. Abbott India reduced its dividend to 175 per cent from 350 per cent and AstraZeneca to 200 per cent from 500 per cent in the last year.

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