Strides Shasun, after merger of Shasun with Strides in November 2015, has posted consolidated net profit of Rs.26.04 crore during the first quarter ended June 2016 as compared to Rs.10.62 crore in the corresponding period of last year, a growth of 145 per cent. Its consolidated net sales increased by 44.6 per cent to Rs.845 crore from Rs.584 crore.
The company issued 210.17 lakh equity shares of Rs.10 each to the shareholders of erstwhile Shasun in terms of the Scheme of Amalgamation. Its equity capital increased to Rs.89.36 crore from Rs.80.63 crore and EPS for the June quarter worked out to Rs.2.91 from Rs.1.34 in the last period.
The sales of global pharma in regulated markets increased by 108 per cent to Rs.371 crore from Rs.178.4 crore. Its pharma sales in regulated markets contributed 43 per cent to its total sales. In North America, base portfolio delivered a steady performance while the growth in revenues was driven by improved market share for recently commercialised products and successful re-launch of acquired Moberg OTC portfolio under Strides label. It received three product approvals from US FDA for Roflumilast, Metmronidazole tablets and Efavirenz tablets. Arrow pharmaceutical in Australia delivered a steady quarter performance.
Its sales emerging market moved up by 64.8 per cent to Rs.145 crore from Rs.88 crore and contributed 17 per cent to its total sales. Africa business delivered steady performance despite macro headwinds including forex shortage in few countries. Universal Corporation's acquisition in east Africa successfully integrated. Entry into new market of South East Asia and Russia CIS gaining momentum.
Its institutional business improved by 40 per cent to Rs.138 crore from Rs.99 crore and contributed 16 per cent to its total sales. However, PSAI business declined by 11 per cent to Rs.217 crore from Rs.245 crore and contributed 25 per cent to its total sales. Weakness in API business on account of lower customer off take, portfolio rationalization with focus on improving product mix and ongoing realignment of infrastructure for captive consumption put pressure. The company is restructuring API business by creating 100 per cent subsidiary.
Arun Kumar, executive vice chairman and managing director, said, “Our regulated markets business and institutional business continue to track well and have delivered another strong quarterly performance. Integration of inorganics in emerging markets has taken longer than we anticipated. All the acquired businesses are now integrated and we believe emerging markets will return to normal growth in the near future. The commodity API business continues to put pressure on margins with cost of compliance going up. We are focused on improving the quality of our businesses and have taken various initiatives that will start bearing results in the second half of the fiscal year.”
Research and development spend for the quarter increased by 75 per cent to Rs.22.8 crore. Its cumulative ANDA filings reached at 53 with US FDA and 27 ANDA filings are pending approval. Further it has 18 cumulative PEPFAR filings. The R&D expenditure in biotech segment amounted to Rs.1.4 crore and it successfully scaled up its first biosimilar bioprocess for the pivotal clinical study. The company is setting up 100% export oriented bio-pharmaceutical unit at Doddaballapur, Bengaluru.
Its interest cost went up sharply by 118 per cent to Rs.60.42 crore from Rs.27.73 croer. Depreciation provision increased to Rs.48.38 crore from Rs.31.82 crore on account of full quarter impact of acquisitions from previous quarter and closure of Moberg portfolio and Universal Corporation acquisitions during the quarter.