Novartis Records Higher Pat At Rs 38.3 Crore

Novartis India Ltd (NIL), formed after the global merger of Sandoz and Ciba Geigy in early 1997, has posted a post tax profit of Rs 38.3 crore in 1997-98. The company recorded a slowdown in growth in its core pharmaceutical sector but made impressive gains in the seeds and animal health areas.

According to the company's 1997-98 annual report, due to be discussed at its annual general meeting scheduled in Mumbai on September 25, a dividend of 40 per cent amounting to a total payout of Rs. 127 crore is proposed. The net sales were Rs 663 crore and overall company growth was at 9%.

Domestic sales grew at 10 per cent while export sales recorded only 2 per cent growth. Merger related costs amounted to Rs. 12.4 crore and all formalities related to restructuring are complete.

The slowdown in the growth in pharmaceuticals at 11 per cent against 15 per cent in the previous year is attributed to the general slowdown in the pharmaceuticals industry.

The report said the company continued to maintain a leadership position in the therapeutics areas of transplantation, pain, tuberculosis, gynaecology and the nervous system. The company introduced five new products for treatment of cancer, cardiovascular drug for hypertension, endocrine therapy, menopausal symptoms and TB treatment.

In the seeds sector, the company recorded a growth of 20 per cent while in animal health, the growth was 25 per cent over the previous year.

The report said this was achieved despite it being a difficult year for the Indian seed industry. Erratic monsoons combined with unseasonal rains in November\December 1997 and surplus production in certain crops led to severe price competition and pressure on margins.

Company executives said the non-pharma component of the company_crop protection, seeds, animal health and vision care would be the focus of concentration in the coming years. Particularly in seeds and crop protection, a range of biotechnology based products were slated for launch.

The merger of Ciba and Sandoz at the global level had caused a sensation in the world pharmaceutical market causing fears of a large monolith dominating the market.

In India Novartis is rated at number 7 in the domestic pharma industry.