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A study of the financial performances of 100 listed pharmaceutical companies made by Pharmabiz for the year 2009-10 showed that they achieved better growth in bottom lines on account of forex gains only as against heavy forex losses in the previous year. The net profit, after foreign exchange and other adjustments, of these companies improved by 79.4 per cent to Rs 10,860 crore in 2009-10 from a net of Rs 6,053 crore in 2008-09. The net profit margin worked out to 11.7 per cent as against 7.3 per cent in the previous year.
However, the growth in net profit before adjustments was not positive and the margins were under tremendous pressure. The net profit before adjustment, in fact,declined by 7 per cent to Rs 10,485 crore from Rs 11,276 crore mainly due to significant higher provision for taxation, lower other income, investment in R&D, recessionary economic conditions, exchange rate movements, and stiff competition. The net profit before adjustment as percentage of net sales declined to 11.3 during 2009-10 from 13.6 in the previous year. The provision for taxation went up by 165 per cent to Rs 3,377 crore from Rs 1,274 crore in the previous year. Thus, the profit margins are under pressure during 2009-10 and likely to continue in the first and second quarter of the current year if international market conditions remain unchanged.
As per the audited/unaudited results, the leading 100 companies recorded forex gain of Rs 38 crore during 2009-10 as against a loss of Rs 4,782 crore in the previous year. This impacted favorably the bottom line of 100 companies during 2009-10.
As per the Pharmabiz study the net sales of 100 listed pharmaceutical companies increased by 11.6 per cent to Rs 92,554 crore during FY2009-10 from Rs 82,904 crore in the previous year. The first 25 companies have dominated the overall Indian pharmaceutical segment with sales contribution of nearly 74 per cent. Among the sample, 23 companies generated net sales of over Rs 1000 crore during 2009-10. The net sales of four companies viz., Plethico Pharma, Surya Pharma, Ankur Drugs and Bilcare crossed Rs 1000 crore mark for the first time in 2009-10. However, two companies i.e. Divi's Laboratories and Dishman Pharmaceutical failed to maintained net sales above Rs 1000 mark.
The overall sales growth of 11.6 per cent during 2009-10 was impacted by cost cutting measures adopted by the several countries and competition. In 2008-09, the sales growth of almost same sample of 100 companies was 22.8 per cent. The net sales of 12 companies declined during 2009-10 in the range of one per cent to 25 per cent.
Relatively small companies(net sales below Rs 500 crore) recorded hefty growth in sales as compared to major pharmaceutical entities with sales above Rs 500 crore. Wanbury generated highest growth of 94.5 per cent in net sales during 2009-10 among the 100 companies and was followed by Smruthi Organics, (78.4 per cent), Bafna Pharma (62.4 per cent), Shilpa Medicare (59.9 per cent), Granules India (59.4 per cent), Elder Health Care (57.9 per cent) and Parenteral Drugs (56.6 per cent.).
Ranbaxy Laboratories (Ranbaxy), Dr Reddy's Laboratories (DRL) and Cipla maintained their sales ranking during 2009-10. Ranbaxy, a subsidiary of Daiichi Sankyo Co of Japan, maintained its first position with sales of Rs 7,329 crore as against Rs 7,225 crore in the previous year, a growth of only 1.5 per cent. DRL's net sales increased marginally by 0.9 per cent to Rs 6,852 crore and that of Cipla's increased by 8 per cent to Rs 5,358 crore. Lupin climbed to fourth spot in the year 2009-10 pushing down Sun Pharmaceutical to fifth spot. Its net sales increased by 25.5 per cent to to Rs 4,741 crore from Rs 3,776 crore in the previous year. With negative growth of 4 per cent in net sales, Sun Pharmaceutical went down to fifth spot with sales of Rs 4,103 crore. Jubilant Organosys and Piramal Healthcare overtake Wockhardt in net sales ranking and grab sixth and seventh position. Wockhardt went down to eighth spot with sales of Rs 3,629 crore. Aurobindo and Cadila Healthcare maintained their ranking at ninth and tenth spot during 2009-10 with sales of Rs 3,575 crore and Rs 3574 crore respectively.
The other income of 100 companies declined by 4.9 per cent to Rs 2,801 crore during 2009-10 from Rs 2,944 crore in the previous year mainly due to lower other income reported by Stride Arcolab of Rs 23.57 crore as against Rs 310.91 crore in 2008-09. Similarly, the other income of Glenmark Pharmaceutical declined to Rs 48.96 crore from Rs 174.01 crore and that of Biocon to Rs 48.96 crore from Rs 64.55 crore. Ranbaxy, DRL, Lupin, Cadila Healthcare, Aurobindo and Torrent Pharma recorded significant growth in other income.
The raw material cost, including stock adjustment and purchases, increased by 15.3 per cent to Rs 42,066 crore from Rs 36,470 crore in the previous year. The staff cost moved up by 14.3 per cent to Rs 11,497 crore from Rs 10,062 crore. Other expenditure including administration, research and development, power and fuel, marketing, etc, increased by 3.6 per cent to Rs 21,841 crore from Rs 21,079 crore. Thus the aggregate expenditure including raw material cost, staff cost and other expenditure, increased by 11.5 per cent to Rs 75,403 crore from Rs 67,611 crore.
Earnings before interest, deprecation, taxation, foreign exchange gains/losses and other adjustments, (EBDITA) increased by 9.4 per cent to Rs 19,951 crore from Rs 18,236 crore in 2008-09. The EBDITA margins worked out to 21.6 per cent as against 22 per cent in the last year. Kopran, Morepen Laboratories, Shilpa Medicare and Themis Medicare recorded strong growth of over 100 per cent in EBDITA during 2009-10. Further, Medicamen Biotech, Ahlcon Parenterals and Parenteral Drugs also pushed up their EBDITA successfully. However, few major companies like Fulford (India), Sun Pharmaceutical, AstraZeneca Pharma, Wockhardt, Dishman Pharmaceutical, Divi's Laboratories, Alembic and Aventis Pharma reported negative growth in EBDITA during 2009-10.
The interest cost of 100 pharma companies increased by 5.9 per cent to Rs 2,465 crore from Rs 2,329 crore and their depreciation provision moved up by 7.9 per cent to Rs 3,624 crore from Rs 3,358 crore. The profit before taxation and adjustments increased by 10.5 per cent to Rs 13,862 crore from Rs 12,550 crore. With higher PBTA, these companies provided higher amount for taxation of Rs 3,377 crore as against Rs 1,274 crore and their net profit before adjustments declined by 7 per cent to rs 10,485 crore. Despite lower profit before adjustments, several companies recommended higher dividend to their shareholders. The equity capital of these companies increased by 7.3 per cent to Rs 2,721 crore from Rs 2,537 crore in the previous year.
Source : pharmabiz.com
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