Thirteen pharmaceutical companies with consolidated net sales above Rs 1000 crore, have reported excellent results during 2007-08 despite significant appreciation of Indian rupee and slow down in US markets. These 13 pharma companies registered a 21.4 per cent growth in net profit and net sales growth of 13.8 per cent during the year.

The earnings before interest, depreciation, taxation and extra-ordinary items, increased by 16.8 per cent. This double digit growth is far better than the growth rate achieved by the world's top 15 companies. The significant growth in other income also pushed the bottom line of these companies.

The PHARMABIZ sample of leading 13 companies viz, Ranbaxy Laboratories, Dr Reddy's Laboratories, Cipla, Nicholas Piramal, Lupin, Wockhardt, Jubilant Organosys, Cadila Healthcare, Glenmark Pharmaceuticals, GlaxoSmithKline Pharma, Torrent Pharmaceutical, Biocon and Alembic notched up consolidated net profit of Rs 5,579 crore during the year ended March 2008 as against Rs 4,594 crore in the previous year. The consolidated net sales moved up to Rs 36,035 crore from Rs 31,666 crore in the previous year. Biocon and Alembic reached sales figure of Rs 1000 crore for the first time during 2007-08.

The consolidated figures include working of main company, subsidiaries and joint ventures. A few large companies with consolidated net sales of over Rs 1,500 crore like Aurobindo Pharma, Sun Pharma and Matrix Laboratories have not yet announced financial results for 2007-08. Based on the first nine months of 2007-08, Orchid Chemicals and Ipca Laboratories are likely to enter in the list of leading companies with consolidated net sales of over Rs 1000 crore.

Ranbaxy once again reached the number one position by displacing DRL to second spot. DRL's net sales reached its highest level among the Indian companies to Rs 6435 crore during 2006-07 with the major acquisition of Betapharm in Germany. However, DRL failed to maintain the top position during 2007-08. Ranbaxy's consolidated net sales went to Rs 6982 crore from Rs 6132 crore in the previous year. Cipla preserved its third position with net sales growth of 18.4 per cent to Rs 4227 crore. Similarly, Nicholas Piramal and Lupin maintained there fourth and fifth position with net sales of Rs 2873 crore and Rs 2706 crore respectively.

Jubilant Organosys, a well diversified company engaged in the pharmaceutical and chemicals segments, achieved consolidated net sales of Rs 2489 crore during 2007-08. Its Pharma and Life Science division's sales went up sharply by 71 per cent to Rs 1530 crore from Rs 895 crore in the previous year. The pharma sales overtook the sales of chemical division and contributed 61.5 per cent of its total sales as compared to only 49.5 per cent in the previous year. The company emerged as one of the largest CRAMS operator in the country with revenues of Rs 1307 crore as against Rs 705 crore in the previous year.

The net profits of Biocon and Glenmark Pharmaceuticals have taken quantum jump of 131.7 per cent and 103 per cent respectively. Biocon's net moved up with divestment of its Enzymes business to Novozymes South Asia Pvt Ltd for a total consideration of Rs 239.37 crore. Similarly, net profit of Jubilant Organosys, Wockhardt, Alembic, Nicholas Piramal and Ranbaxy Laboratories moved up sharply by over 50 per cent during 2007-08. Jubilant Organosys' net profit touched to Rs 401 crore as compared to Rs 228 crore in the previous year.

Dr Reddy's Labs (DRL) experienced a major setback due to generic competition in US and its net profit nosedived by 54.6 per cent to Rs 438.13 crore from Rs 965.89 crore. Further, GlaxoSmithKline Pharma, a leading MNC with net sales of Rs 1577 crore, failed to generate higher net profit. Its net profit declined marginally by 1.4 per cent to Rs 537.66 crore from Rs 545.51 crore. The net profit of Cipla was also under pressure and moved up only by 4.9 per cent to Rs 700.48 crore from Rs 668.03 crore.

The other income of 13 leading pharma companies increased by 68.3 per cent to Rs 1506 crore during 2007-08 from Rs 895 crore in the previous year. The other income of Ranbaxy went up sharply to Rs 443.35 crore from Rs 68.28 crore. The other income including other operating income of Ranbaxy increased mainly on account of export benefits, forex gain and share of revenue from Bayer AG on Ciprofloxacin OD.

Further, other income of DRL, Cipla, Cadila, Glenmark, GSK, Torrent Pharma and Biocon increased over by 25 per cent during 2007-08. Though, DRL's license fees and service income declined to Rs 77.51 crore from Rs 90.97 crore, its other income went up to Rs 203.77 crore from Rs 116.16 crore. Glenmark sold its investment in its wholly owned subsidiary i.e. Glenmark Generics (Europe) Ltd, UK to its wholly owned subsidiary for a consideration of Rs 60.1 crore, which pushed its bottom line by the same amount. Thus, the other income played key role in profitability of many companies in Pharmabiz sample.

The investment in R&D, filling of higher number of ANDAs and DMFs in highly regulated market, mergers & acquisitions, in-licensing, skilled labour force, high standard scientific base and revenues from CRAMS will give necessary edge to Indian companies in the coming years. More and more Indian companies are likely to capture the milestone of Rs 1000 crore revenue in next few years with higher international market share.

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