Cipla third-quarter profit falls as lean India sales, tax cost weigh

(Reuters) - Cipla Ltd, India's second-largest generic drugmaker by market capitalisation, reported on Wednesday a 17.1 percent drop in quarterly profit, dragged down by higher tax expenses and weak sales in domestic market.

Net profit came in at 3.32 billion rupees ($46.36 million), compared with a profit of 4.01 billion rupees last year.

Twenty analysts had expected the generic drugmaker to post a profit of 3.72 billion rupees, according to Refinitiv Eikon data.

Cipla, in its last quarterly earnings in November, had warned of headwinds in the second half of the financial year.

The upcoming challenges include capacity balancing in certain categories at plants, sanctions, higher crude and commodity prices, Cipla had stated earlier.

During the third quarter, the company reported a total tax expense of 1.26 billion rupees, against a tax credit of 642.3 million rupees last year.

India sales, which accounted for nearly 40 percent of the total, declined 1 percent to 15.85 billion rupees, Cipla said.

However, net sales rose 1.9 percent to 39.06 billion rupees, while North America sales surged 31 percent to 8.49 billion rupees.

Shares in Cipla closed 5.3 percent firmer on Wednesday after the results were announced in a Mumbai market, which ended 1.17 percent higher.

($1 = 71.6150 Indian rupees)

(Reporting by Krishna V Kurup and Tanvi Mehta in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)