Ranbaxy net profit up 19.5%

Ranbaxy Laboratories Ltd today announced a 19.54 per cent rise in net profit to Rs 121.10 crore for the quarter ended June 30 this year, on the back of cost reduction exercises and improved US sales, and issued a robust guidance for future quarters.

Ranbaxy expects robust earnings from sales of generic simvastatin, for which the company recently won an exclusive marketing period of six months in the US.

It also expects revenues from Terapia, the Romanian generic company it acquired in March this year for $324 million, to start adding to its top line from this month. Ranbaxy's sales for the first quarter rose 7.3 per cent to Rs 1446.4 crore from Rs 1347.9 crore in the same quarter of last year.

"The key development has been the launch of simvastatin 80 mg in the US for which we have exclusivity till the end of this year. In the first week of the launch, we have cornered more than 50 per cent of the generics market," said managing director Malvinder M Singh at a press conference at the company's corporate office in Gurgaon, near Delhi.

He said the company was on track to achieving its target of $2 billion in sales by 2007. Ranbaxy's expenditure on research and development has declined by 27 per cent to Rs 81.9 crore, while that on selling, general and administration has fallen 7 per cent to Rs 411.7 crore.

"We have achieved significant cost reductions with a decline in intellectual property, research and operational expenses. We haven't dropped any new chemical entity or reduced the size of team of scientists that we have," said Singh.

Ranbaxy's sales in the domestic market have grown 4 per cent to $67 million, while the US sales have increased 8 per cent to $89 million, and those in Europe have declined by 17 per cent to $ 46 million

"There is tremendous opportunity in Europe where we have already made four acquisitions this year....more can come by depending upon the opportunities. We would be looking at the BRIC (Brazil, Russia, India, China) countries, including the domestic market," said Singh.

Ranbaxy's shares closed on Bombay Stock Exchange today at Rs 349.90 per share, up 7.36 per cent over its previous close even as the Sensex moved up 3.45 per cent.