Novartis India, a Rs.845 crore MNC from Mumbai, has posted strong growth in net profit during the fourth quarter ended March 2015 to Rs.51.94 crore from Rs.23.88 crore in the corresponding period of last year, a growth of 118 per cent. Its net sales, however, improved only by 4.8 per cent to Rs.202.38 crore from Rs.193.03 crore. EPS improved significantly to Rs.16.30 from Rs.7.47 in the last period. The board of directors has recommended equity dividend of Rs.10 per share of Rs.5 each.
For the full year ended March 2015, Novartis' net sales improved marginally by 0.7 per cent to Rs.845.29 crore from Rs.839.78 crore in the previous year. Its net profit declined by 19.7 per cent to Rs.79.11 crore from Rs.98.53 crore as its tax provision increased sharply to Rs.15.56 crore as against tax income of Rs.8.63 crore in the previous year. Its pharmaceutical revenue increased by 3.3 per cent to Rs.599.89 crore from Rs.580.58 crore. However, the sales from generic declined to Rs.48.44 crore from Rs.52.43 crore. The sales from OTC products improved marginally to Rs.129.38 crore from Rs.125.51 crore.
The company has decided to divest OTC business to GlaxoSmithKline Consumer Pvt Ltd for a consideration of Rs.109.73 crore after certain approvals. Further, Novartis set to divest animal health division to Elanco India Pvt Ltd, affiliate of Lilly, for a consideration o Rs.86.68 crore after certain approvals. Closing of the animal health transaction in India is conditional upon the receipt by Elanco India of the written approval of the Foreign Investment and Promotion Board, India (FIPB). FIPB has not approved the proposal due to the existence o the restrictions on competition. Novartis India has not accounted total divestment transaction consideration of Rs.196.41 crore in the results for March 2015 due to pending approvals. The company has shown transaction cost under extra-ordinary items.
The company received NPPA demand notice directing the company to pay Rs.28.18 crore by November 2014 in respect of over charge on sales of Voveran 50 GE tablets. This demand has been challenged before the Delhi High Court which granted a stay on the demand and the matter is posted for further hearing on August 10, 2015.