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Ranbaxy reports sharp drop in net profit
India's Ranbaxy Laboratories, which is being taken over by Japan's Daiichi Sankyo for up to $4.6 billion, reported a sharp drop in quarterly net profit on foreign exchange losses.
- Reuters
- Published: 23:47 July 29, 2008
New Delhi: India's Ranbaxy Laboratories, which is being taken over by Japan's Daiichi Sankyo for up to $4.6 billion, reported a sharp drop in quarterly net profit on foreign exchange losses.
Ranbaxy, India's top drugmaker by sales, has grown globally by selling generics - cheap copies of off-patent branded drugs - and challenging patents held by Western firms.
New Delhi-based Ranbaxy said consolidated net profit plunged to Rs229 million ($5.4 million) for its second quarter ended June from Rs2.64 billion a year ago. Net sales rose 12.7 per cent to Rs18.30 billion.
A weak rupee resulted in Ranbaxy's foreign exchange losses swelling to Rs1.93 billion, against a gain of Rs2.01 billion in the same period a year ago, said chief financial officer Omesh Sethi on Tuesday.
Shares in Ranbaxy, valued at nearly $5 billion, closed 3.8 per cent lower at Rs474.80, having fallen as much as 5.2 per cent after its results were announced. The main Mumbai index ended 3.9 per cent lower.
Ranbaxy aims to be among the world's top five generic drugmakers with $5 billion sales by 2012.
But a US probe into whether Ranbaxy submitted false data to support generic drug applications and tried to hide manufacturing violations has raised concerns about the firm's future in the main US market, which accounts for 24 per cent of revenue.
Malvinder Singh, the group's chief executive, said he was hopeful a motion filed by the US authorities against the company would be withdrawn next week after Ranbaxy and its reviewer Parexel Consulting submit requested documents.
"We continue to be very optimistic about the US market," Singh told a news conference. He said the company was evaluating more alliances and acquisition opportunities.
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