Orchid Chemicals and Pharmaceuticals, a Rs.1,825 crore plus pharma major from Chennai, has posted higher consolidated net loss of Rs.74.7 crore during the third quarter ended December 2012 as compared to Rs.11.06 crore in the corresponding period of last year on account of tight working capital levels and debt leverage. Its consolidated net sales also declined sharply to Rs.322 crore from Rs.497 crore, representing a fall of 35.2 per cent. Orchid scrip opened lower at Rs.73.40 on BSE as against its previous day closing of Rs.77 on account of poor performance.

Kraghavendra Rao, chairman and managing director, said, “The overall performance of the company continues to witness pressure due to the tight working capital levels and debt leverage. We are working on completing the transfer of our penicillin & carbapenem business to Hospira and will see a significantly deleveraged position from the deal proceeds leading to improved performance in the quarters to come.”

For the nine months period ended December 2012, Orchid's consolidated net sales declined by 21.6 per cent to Rs.1,107 crore from Rs.1,412 crore in the similar period of last year. Its net loss went up to Rs.153 crore as against a net profit of Rs.82.2 crore. Its finance cost worked out to Rs.219.55 crore and employees cost at Rs.133 crore. The company has not provided the previous period information in its statement. Exceptional items represents profit on sale of investments in the joint venture in China of Rs.53.34 crore and exchange loss on FCCBs of Rs.20.79 crore. Thus, the net exceptional items worked out to Rs.32.55 crore.

The company has entered into business transfer agreement with Hospira Healthcare India Ltd for the sale and transfer of Orchid's penicillin and penem API business and the API facility located in Aurangabad. Together with associated process R&D infrastructure located in Chennai. The transaction is expected to be completed before March 31, 2013.

Orchid Chemicals standalone net sales for the nine months declined sharply 23.2 per cent to Rs.960 crore from Rs.1,250 crore in the same period of last year and its standalone net loss went up to Rs.143 crore from a net profit of Rs.85 crore.