Ranbaxy Q1 net up 79% on higher sales in Europe

New Delhi, Apr 27 | Updated: Apr 28 2007, 08:22am hrs
Acquisitions in Europe helped Indias largest pharma company Ranbaxy Laboratories Ltd report a 79% increase in Q1, 2007 net profit to Rs 128.7 crore ($29 million), though sales in the key US market remained flat. Consolidated revenues stood at Rs 1,564.4 crore, a growth of 23% year-on-year.

Announcing the results, Ranbaxy chief executive Malvinder Singh said that the company had raised 2007s forecast by 20%. Shares of Ranbaxy closed at Rs 369.95 on the Bombay Stock Exchange (BSE), down 0.59%, in an overall weak market that saw the Sensex crash 320 points.

Sales in Europe, which grew 78% at $93 million, were helped by last years $324 million acquisition of Romanias Terapia. The company had last year bought as many as eight firms as part of a global expansion. Asked whether the company was eyeing more acquisitions, Singh said, If a right opportunity comes in that is accretive and valuable, we will not back out. He also justified Ranbaxys withdrawal from the bid for the generic business of Germanys Merck.

Singh said that the company was hopeful of sales going stronger in the coming months. As we go through successive quarters, we will continue to see stronger and better growth happening, he said. Elaborating on sales in Europe, Singh said that besides Romania (where sales grew 50% at $37 million), the UK market registered a growth of 77% in the quarter while Poland, Germany and other key European markets also contributed considerably.

However, US appears to be a cause for concern for Ranbaxy as sales were flat at $86 million and margins were under pressure in a highly-competitive market. Singh, however, said that the company has 88 Abbreviated New Drug Applications (ANDA) pending in the US, which are targeted at an estimated market of $56 billion. Two-thirds of these drugs will be launched between now and 2010, Singh said.

During the quarter, Ranbaxy received FDA approval for the launch of cholestrol-lowering Pravastatin 80 mg tablets with a 180-day marketing exclusivity in the US. Pravastatin market in the US is estimated to be $200 million. We are confident that we will gain a significant share in this market and become the number one player in this product category, Singh said.