Piramal Healthcare, a Rs. 3,650 crore plus pharma major from Mumbai, has posted huge net profit of Rs. 12,540 crore during the quarter ended September 2010 on account of sell of its domestic formulation business, sale of investment of subsidiary Piramal Diagnostic Services Pvt Ltd (PDSPL) and closure of Vitamin and Fine Chemical Plant at Thane. Its consolidated net sales for the quarter declined to Rs. 731.41 crore as against Rs. 992.74 crore in the similar period of last year. Thus, these figures are not strictly comparable on account of restructuring of business operations.
The company has shown a total exceptional income of Rs. 16,224 crore with sales of businesses during the quarter under review. With huge profits, the company announced buy-back of shares at Rs. 600 each after certain approvals.
Piramal Healthcare has made a profit on sale of domestic formulation business of Rs. 16,006 crore. It entered an agreement with Abbott Healthcare Pvt Ltd (Abbott) for the sale of its domestic formulation business on slump sale basis for net cash consideration of on September 7, 2010. Further, the company sold its 97.5 per cent holding of PDSPL to Super Religare Ltd (SRL) or consideration of Rs. 362.97 crore. Piramal Healthcare recognized a profit of Rs. 285.82 crore. The company also sold its entire stake of 49 per cent in joint venture Arkray Piramal Medical Pvt Ltd held by its subsidiary, PHL Fininvest Pvt Ltd and recognised a profit of Rs. 17.74 crore.
Piramal Healthcare has provided Rs. 22.32 crore towards permanent diminution in the value of the investment made Biosyntech Inc, Canada as the company filed for bankruptcy protectin under the Bankruptcy and Insolvency Act, Canada. Piramal also shifted its manufacturing operations of vitamins and fine chemicals from its Thane Unit to Digwal & Mahad Unit. Consequently it has been decided to shut down Thane plant effective September 30, 2010. The company has made the provision for total closure cost of the plant (including VRS) of Rs. 40.70 crore in accounts.
The provision for taxation went up sharply with above changes in business operations to Rs. 3643.85 crore during the quarter ended September 2010.
For the first half ended September 2010, the company's net sales, after selling of its business operations, worked out to Rs. 1570.72 crore from Rs. 1809.61 crore in the same period of last year. Its net profit after adjustments, went up to Rs. 12,621 crore from Rs. 191.37 crore in the last period.