Ranbaxy beats forecasts, records 118% rise in net profit

22 July, 2007:

Ranbaxy Laboratories, the largest pharmaceutical company in India, has reported a 118% leap in its consolidated net profit for the second quarter ended June 30, 2007.

Ranbaxy Laboratories, India’s top drug maker by sales, follows the calendar year as its fiscal year. Ranbaxy accomplished this feat, beating forecasts, aided by a rapid growth in Europe and the rising rupee.

The drug firm, predicted to earn $5 billion in annual sales by 2012, posted a net profit of Rs 2.63 billion ($65 million) for the April-June 2007 quarter, as opposed to Rs 1.22 billion a year ago.

Ranbaxy reported a standalone profit of Rs 2.9 billion. Excluding foreign exchange gains/losses, Ranbaxy's consolidated net profit amounted to Rs 1.6 billion.

Malvinder Singh, chief executive of Ranbaxy, said the company’s focus on branded generics and the strength of its business in key markets contributed to its strong performance in the second quarter.

Ranbaxy, based in New Delhi, is aiming to become one of the world’s top five generic drug firms.

According to analysts, Ranbaxy Laboratories gained from the nearly 7% appreciation of the rupee during the second quarter of 2007 as it lowered its foreign debt in rupee terms.

Rupee rose by about 7% against the dollar in the last quarter, affecting margins of most dollar-denominated exports.

Before the results were released, Merrill Lynch had estimated Ranbaxy’s currency gain from foreign convertible bonds and overseas loans at Rs 1 billion rupees ($24.8 million).

An official of Ranbaxy said the company’s consolidated sales grew by 12% to Rs 16.2 billion.

The firm’s revenue was boosted by eight companies it bought in 2006, particularly Romanian pharmaceutical firm Terapia, which it acquired for $324 million.

Towards the end of the second quarter, the company also received 180-day exclusivity to market 80-mg Pravastatin, which is used to prevent coronary problems.

Ranbaxy’s sales in Europe grew by 55% to $86 million, while sales in North America increased by 7% to $102 million.