Ranbaxy Net Profit Up To Rs 150 Crore

Delhi-based pharmaceuticals major Ranbaxy Laboratories Ltd yesterday reported unaudited sales of Rs 1,065.7 crore and a profit after tax of Rs 149.6 crore in fiscal 1996. Ranbaxy has thus registered an increase of 22 per cent in sales over the Rs 876.6 crore notched up in the previous year, while its net profit has risen by 11 per cent over the previous figure of Rs 135 crore.

The companys earnings per share (EPS) on the increased year-end share capital of Rs 49.4 crore stood at Rs 30.27 against Rs 30.42 on share capital of Rs 44.4 crore in 1995-96.

Domestic sales accounted for Rs 543.9 crore of the total sales, while exports contributed Rs 521.8 crore. Profit before interest and depreciation has risen by 29 per cent from Rs 155.6 crore to Rs 200.6 crore.

 

The company has also enhanced its profitability by reducing both its interest and tax burden. While interest charges have dropped from Rs 27.3 crore in 1995-96 to Rs 2.5 crore in 1996-97, the tax burden fell from Rs 23.5 crore to Rs 21 crore during the same period.

Addressing a press conference here, Ranbaxy chairman and managing director Parvinder Singh announced the setting up of a 100 per cent subsidiary, called Rexcel Pharmaceuticals, to market the range of Gufic brands that the company acquired last year.

The subsidiary, which has been set up with an initial equity capital base of Rs 2 crore, will market the therapeutic antibiotics and dermatological drugs of Gufic Laboratories.

Discussing Ranbaxys results, Singh said: The company recorded significantly higher operating margins, reflecting its emphasis on sales of dosage forms.

Singh indicated that the company plans to increase its investment in research & development from 4 per cent of sales to at least 6 per cent within the next few years.

Meanwhile, analysts said the results were in line with expectations and show that the company relied less on export turnover last year.

Although Ranbaxys operating margins have gone up due to greater emphasis on formulations, the export contribution has gone down from last years 36 per cent to 27 per cent this year, pointed out James Capel B&K analyst Tarun Jaitly.

Although the top line growth will remain around 20 per cent in the coming years, Ranbaxy will take some time to get over the transition hiccup of the Crosslands merger and the purchase of Gufics brands, he added.

Predicting that Ranbaxys EPS would rise slightly in 1997-98, Jaitly estimated that the Crosslands merger would add another Rs 87 crore to Ranbaxys turnover.

Kotak Securities Alroy Lobo was optimistic about the company, saying, Eli Lily Ranbaxy, the marketing joint venture of Ranbaxy and Eli Lily, has already captured a market share of 0.2 per cent and is expected to record a revenue growth of 40 per cent next year. He added that Ranbaxy, UK, had achieved a breakthrough in the UK market with the launch of the generic version of Cefaclor.