Unichem Labs dips on weak Q1 results

EBITDA margin declined 130 basis points to 15% impacted by increase in employee cost and higher raw material expenses.

Unichem Laboratories has dipped 4% to Rs 188 after reporting 16% year on year drop in standalone net profit at Rs 30.20 crore for the quarter ended June 30, 2014 (Q1), due higher expenditure and lower other income. The pharmaceutical company had profit of Rs 36.10 crore in the same quarter year ago.

Income from operations however, jumped 9.6% to Rs 291 crore in June quarter as against Rs 266 crore in a year-ago period , Unichem Lab said in a statement.

EBITDA (Earnings before interest, tax, depreciation and amortization) margin declined 130 basis points to 15% from 19.3% impacted by increase in employee cost and higher raw material expenses.

Meanwhile, in past seven trading sessions, the stock has tanked 21% from Rs 237 on July 3, as the European Commission decided to impose a fine on Niche/Unichem (jointly and severally) contending that it had acted in breach of EU Antitrust Rules.

Unichem said it will vigorously appeal the European Commission decision to the EU courts and seek to attain the correct result in this matter a result which is the best interests of the consumer.

The stock opened at Rs 195 and touched a low of Rs 185 on NSE. A combined 60,447 shares changed hands on the counter so far on NSE and BSE.