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Ranbaxy Laboratories Posts Surprise Q2 Loss

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Ranbaxy Laboratories, India's top drugmaker by sales, posted an unexpected quarterly loss of Rs 586 crore as foreign exchange losses ballooned although sales in its key US market more than doubled.

Ranbaxy, controlled by Japan's Daiichi Sankyo Co, recorded a loss of Rs 599 crore on foreign currency derivatives in fiscal second quarter ended June, compared to a gain of Rs 112 crore a year earlier, it said.

Net sales rose 54.5 per cent to Rs 3174 crore, Ranbaxy said.

Analysts had forecast net profit at Rs 321 crore on net sales of Rs 2906 crore, according to Thomson Reuters I/B/E/S.

The depreciation of the Indian rupee against the dollar, though favourable to Ranbaxy's export business, had an adverse impact on the company, said Ranbaxy.

"Sales and profitability grew in the quarter with overall improvement across major regions, aided further by exclusivity sales in some of the key markets," Arun Sawhney, chief executive, said in a statement.

Sales in North America, Ranbaxy's biggest market, grew 140 per cent to Rs 1471 crore in April-June, primarily due to the generic version of Lipitor, Pfizer's cholesterol-lowering blockbuster drug.

Ranbaxy settled a compliance-related dispute with the US drug regulator early this year and can now ship products from its Indian factories to the world's largest drug market.

Indian drugmakers including Ranbaxy, Dr Reddy's Laboratories and Sun Pharmaceutical Industries account for about a third of applications to sell generic drugs in the United States and are expected to double their sales in that market to about $5 billion (Rs 27,650 cr) over the next five years.

But they face intense competition, rising lawsuits from rival drugmakers and a stricter US health regulator in their race for the lucrative off-patent market.

Valued at $3.9 billion (Rs 21,567 cr), shares in Ranbaxy closed down 2.7 per cent at 501.80 rupees on Thursday. The stock is up about 24 per cent this year, in line with the benchmark healthcare index's 24.4 per cent rise.