Only six of the top 25 drug companies, which include Dr Reddy's Lab, Sun Pharma and Zydus Cadila, could post better net profit in the December quarter in comparison to the corresponding previous quarter, while six leading drug makers posted net losses.

In a continuing trend for the previous two quarters, foreign currency fluctuations and mark-to- market losses are affecting profits of India's drug makers, despite increase in net sales ranging between 4.5 and 42 per cent for most of the firms during the three-month period.

"The domestic market continues to grow and those who have long-term supply contracts and product pipeline in the US and Europe will not suffer in the near or long term future. The business and future prospects for companies vary on a case to case basis, based on contracts and products they have committed," said Hitesh Gajaria, executive director, KPMG India.

"The worst (due to forex losses) should be over for most companies and on a broader basis, the top line should grow by 15-20 per cent for all the companies in the coming quarter," said Sarabjit Kaur Nagra, vice-president, research, Angel Broking.

The worst performer for the quarter was Ranbaxy Laboratories, which posted a consolidated net loss of Rs 915 crore as against a net profit of Rs 787 crore in the previous year. The company incurred a loss of Rs 353 crore in the previous quarter and a flat Rs161 crore net profit in the second quarter. However, Ranbaxy maintained its position as the largest drug company in India with an annual sales turnover of Rs 7,251 crore and a growth of 8 per cent over the previous year.

However, Dr Reddy's Lab, the second-largest domestic drug maker in terms of sales, bounced back with 156 per cent jump in net profit and 50.5 per cent jump in revenue for the third quarter. This was mainly due to exclusive gains from the launch of an authorised generic version of GlaxoSmithKline's Imitrex (Sumatriptan Succinate) in the US since November, based on an out-of-court settlement. Its net profit was down by 52 per cent and 26 per cent respectively in the previous two quarters.

Affected by forex losses, Cipla, the third-largest Indian drug company, had a moderate 6.1 per cent jump in net profit, whereas its net profits were down by 21 per cent in the previous quarter and 17 per cent in the first quarter of 2008-09. The company had to account for Rs 42 crore as loss for the quarter on revaluation of forward contracts, outstanding debtors and foreign currency loans, which was Rs 104.50 crore and Rs75 crore respectively in the previous two quarters.

"In this changing market, those who innovate and focus on speciality products and add value to their business by judicious investments in marketing strategies will gain. The companies will have to re-invent their business models to sustain growth in future," said Dr R B Smarta, managing director of Interlink Marketing Consultancy.

Sun Pharma's net profit was up only 28 per cent for the quarter, compared with 135 per cent and 121 per cent in the immediate previous quarters. Though its international revenues grew well, the performance of its US subsidiary Caraco was subdued for the quarter due to slowdown in the US.

While Piramal Healthcare and Lupin had a lacklustre performance for the quarter as against fairly good numbers in earlier quarters, Hyderabad-based Aurobindo recovered to post profits, compared with Rs 38.42 crore in Q2 2008-09. Glenmark, which is now facing the issue of lack of additional income from drug outlicensing deals, had its net profit down by 71 per cent, compared with 56 per cent and 102 per cent growth in net profits in the previous quarters.

However, the problems of companies such as Jubilant, Orchid, Shasun, Matrix and Panacea are continuing. Jubilant, which went in for a couple of costly acquisitions in the US in the recent years, posted a Rs 88 crore loss for the quarter, mainly triggered by a forex loss of Rs 131 crore. The company had losses of Rs 62.37 crore in the previous quarter and its net was down to just Rs 12.76 crore (Rs 142.86 crore in previous year quarter in the first quarter of 2008-09).

Chennai-based Orchid is facing competition for its cephalosporin products in the US and could not post either higher sales or profits.

Forex losses are pressurising Chennai-based Shasun, which posted a net loss of Rs 19 crore for the quarter and Rs 31.53 crore in the corresponding previous quarter.

Panacea Biotec also posted losses for the current and the previous quarters.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Wall Street opens higher on Greek deal - Oil cos seek compensation for losses on petrol - Centre for 6% road tax on cars, two-wheelers - RBI raises bank rate to 9.5% - Axis Bank reappoints Shikha Sharma as Managing Director

Read Business news in  Advertisements -  Now property search gets more exciting than ever before! -  High Growth Business Opportunities in Africa - Register to explore -  Save over Rs.3000 with IndianOil Citibank Card -  We live for our family. have you secured them? -  Are You Serious About Your Future? Click here to know more -  Financial Learning now made easier and more convenient. -  India's No. 1 Property Site. Click here to know more.. -  Get 5% cashback on telephone bills with Citi -  Exim Bank Conclave on India - Africa Project Partnership. Know more.. -  Be part of it The World's Largest Aircraft. -  Creating Wealth made simple the SIP way. Know more.. -  Only Developer to give a guarantee on time space & rate. -  Office 365 for professionals and small businesses. -  Buy Your Property with Our Triple Guarantee in India. -  Improve Patient Care & Experience. Click here to know more -  Win a Business Class Ticket to Europe..Know more.. -   Introduce a New Automotive Luxury Car.. know more -  Health is Wealth..... Insurance + Savings... Know More...