Ranbaxy raked in 55 per cent growth in revenues for the June quarter over the same period last year on the back of exclusive Lipitor and Caduet sales in the US. These products constituted over a third of the company’s total sales.
But the company posted net loss of Rs 586 crore for the quarter on account of marked-to-market forex loss to the tune of Rs 850 crore.
Of this, adjustments in loans and other receivables on account of foreign exchange fluctuations stood at Rs 250 crore.
The other Rs 600 crore forex loss was incurred on options purchased for hedging foreign exchange exposure.
Barring India (13 per cent growth), the US (143 per cent) and West Europe (25 per cent), revenue from other geographies such as Eastern Europe and CIS, Latin America, Africa declined during the quarter on account of rupee weakness against major currencies. Despite a low base, Ranbaxy posted lack lustre 13 per cent growth in India.
Higher raw material costs and contractual payments made to Teva for marketing Lipitor negated the benefit from exclusive Lipitor sales. As a result, operating margins excluding forex loss stood at 14.2 per cent against 26.8 per cent in the previous quarter. Interest cost of Rs 165 crore against Rs 25 crore in the same quarter last year, is due to notional loss of Rs 116 crore on overseas borrowings.
Ranbaxy expects to launch its two novel derma products Absorica and Ximino by end of the current year, with the launch preparations ongoing.
Given the lack of clarity on the quantum of penalty to resolve the pending regulatory issues with the US authorities – Department of Justice and the food and drug administrator, the ability of the company to monetise it’s exclusive opportunities such as cardiovascular drug Diovan and base business performance in the current quarter will determine its future growth potential