Five-fold jump in profit for India's Ranbaxy

MUMBAI: Leading Indian drugmaker Ranbaxy Laboratories reported Tuesday a near five-fold jump in full-year net profit as demand for generic drugs overseas improved.

Net profit for the generic and branded drugs maker, a unit of Japan's Daiichi Sankyo, climbed to 14.96 billion rupees ($332 million) for the 12 months to December 31, 2010 from 2.96 billion rupees a year earlier.

Consolidated sales rose 16 percent to 85.35 billion rupees, the company said in a statement.

"We have had a strong year, attributable in large measure to the robust revenue growth in our key markets," Arun Sawhney, managing director of Ranbaxy, said in the statement.

But the earnings fell short of market expectations that Ranbaxy would post a full-year profit of 16 billion rupees, pushing down the company's shares by 3.05 percent or 15.55 rupees to 494.2 on the benchmark 30-share Sensex index.

"The earnings are marginally below our estimates," said Sarabjit Nangra, analyst at Mumbai-based Angel Broking.

The company did not disclose fourth-quarter data but analysts said they had calculated that the firm posted a loss of 980 million rupees in the three months to the end of December.

Global demand for generic drugs from Ranbaxy and its Indian rivals, Dr Reddy's Laboratories and Cipla, has been improving as developed countries battle high healthcare costs.

Last month, Dr Reddy's swung into a profit in its third-quarter earnings of 2.7 billion rupees ($61 million) from a loss a year earlier.

Ranbaxy said that its 2011 sales could reach 84 billion rupees ($1.87 billion).

The firm said global sales were nearly evenly split between emerging markets and developed markets.

Drug sales in the United States, where the company launched Donepezil Hydrochloride tablets for use to treat Alzheimer's, contributed $600 million, up 80 percent from a year earlier.

US market conditions remained "challenging", the company said.

It described the European market as "competitive" for generic drug companies. Sales in the region were flat at $272 million -- just one percent growth year-on-year.

The company reported foreign exchange gains of just over one billion rupees in the year on the back of the Indian rupee, which rose four percent against the dollar in the year.

During the year, Ranbaxy transferred its new drug discovery research to Daiichi Sankyo India Pharma Private Ltd, as part of a strategy to strengthen the global research structure of the Daiichi Sankyo Group.