Piramal Healthcare Q3 net plunges 86% on higher R&D spend

Drugmaker Piramal Healthcare's quarterly net profit plunged 86% as research and development (R&D) expenses zoomed, while income from investments declined.

Piramal Healthcare, which makes over-the-counter drugs and manufactures pharmaceutical products on contractual basis, said consolidated profit fell to Rs 8.52 crore in October-December compared to Rs 60.33 crore a year earlier.

The company's sales rose 38.7% to Rs 560 crore.

Piramal Healthcare acquired the drug discovery business of group company Piramal Life Sciences in August last year. The acquired business has about 15 molecules in the clinical trials phase and need extensive financial support.

Post the acquisition, Piramal Healthcare's R&D spend rose over 8 times to Rs 121 crore in December quarter.

Piramal sold its Indian formulations business to US-based Abbott Laboratories for $3.72 billion in 2010.

It used the cash from the sale to diversify into sectors like financial services and also make financial investments.

The drugmaker also acquired a 5.5% stake in Vodafone's India mobile operations for $640 million in August last year.

Post the investment, the drugmaker's income from investments fell to Rs 58.9 crore in the fiscal third quarter from Rs 132 crore in the previous year, it said.

Its financial services business generated an income of Rs 17.8 crore in the quarter, it said.

Shares in Piramal Healthcare, valued at $1.45 billion, closed at Rs 418.95 on Thursday, up 0.35% on the BSE today.