Cipla's Q3 Profit Hurt By One-off Charge
The company posted a net profit of Rs 343 crore for the quarter ended December 31, slightly above the Rs 328 crore reported a year earlier
India's fifth-largest drugmaker, Cipla Ltd, said its quarterly profit fell below analysts' expectations due to a one-off charge related to changes in the way it distributes drugs in its home market.
Cipla, which gets a majority of its sales from India, posted a net profit of Rs 343 crore ($50.58 million) for the quarter ended December 31, slightly above the Rs 328 crore reported a year earlier. Analysts, on average, expected a profit of Rs 428 crore.
Sales in India fell 0.4 per cent, but were up stripping out the distribution related charge, Chief Executive Subhanu Saxena told reporters on Wednesday (10 February).
Cipla, which is less exposed than domestic rivals to the United States, said it will file up to four products for US marketing approval each year as it sharpens its focus in the world's largest healthcare market, Saxena said. The region makes up 8 per cent of its total sales.
Cipla's US push comes at a time when rivals face slowing growth in that market, partly due to sanctions and warnings by the US Food and Drug Administration on their India factories due to poor quality control practices.
The FDA late last year cited a Cipla plant as well, in Indore in Madhya Pradesh, for violations of manufacturing practices. Saxena said Cipla had responded to the FDA's observations, which the company believes were "not significant", and is confident would be resolved soon.
India, South Africa, and Yemen, are among about 15 markets that Cipla plans to improve focus on in the next few years, as it streamlines its business, Saxena said. In India, it plans to double its current sales by 2020, he said.
Shares in the company closed down 3 per cent on Wednesday in Mumbai.