Indian generic drugmaker Ranbaxy’s has posted a 1% rise in consolidated net profit for the fourth quarter, beating analysts’ expectations which had forecast a dip for the period on pricing pressures and exchange rate effects.
But the group still managed to report a rise in consolidated net profit to 1.87 billion rupees for the period, after sales climbed 5% to 17.9 billion rupees, primarily on a strong performance by its developed markets in the UK, Germany, France, Italy and Canada. The emerging markets of India, CIS, Romania, South Africa and Brazil, which make up 54% of global sales, also helped swell profits, registering strong growth of 24%.
For the full year, Ranbaxy posted 15% organic growth in earnings to 6.1 billion rupees crore, while revenues were up 9% at 66.3 billion rupees, following a shift towards the high growth and more profitable branded emerging markets.
By region, it was the European Union that turned in the highest growth in sales, which were up 24% at $363 million, closely followed by Asia and CIS, up 22% at $501 million, and in North America they climbed 6% to $113 million.
Business also continued to grow well in its domestic market, with revenues up 22% at $301 million (11% in rupee terms) and the company keeping hold of its position amongst the top two companies in the market place.
Aiming high
“The results for the year 2007 are per our expectations,” commented Malvinder Mohan Singh, chief executive of Ranbaxy. Looking forward, he said the group had “taken appropriate steps to structure the business for the future, by forming alliances in several niche therapeutic areas, enhanced product visibility and brought in certainty of profit flow for the future,” and claimed that “the coming years will see Ranbaxy emerge stronger and better positioned to achieve its goal of becoming a top five global generics company”.
But shareholders failed to buy into his enthusiasm and, although the quarter’s results came in above expectation, the stock closed the day nearly 3% down on the Bombay Stock Exchange. Also playing a part in the downturn could be the fact that Ranbaxy had been expected to reveal plans for divesting its R&D business, but this has now been put back to next month.
