Reeling under the impact of the reduction in prices of its medicines due to the expanded control of the Drug Price Control Order (DPCO), Novartis India reported a marginal 3.17 per cent rise in its standalone net profit to Rs 14.31 crore for the quarter ended June 2014.
The company’s total income from operations declined 6.4 per cent at Rs 208.8 crore while net sales were lower by 8 per cent at Rs 202 crore.
In a statement, the company said, “The reduction in selling prices of some key products arising out of the notification of Drug Price Control Order had a significant adverse impact on the revenue and operating profits of the company. Depreciation of the rupee further impacted the profits.’’
At the company’s annual general meeting held on Friday, shareholders approved a dividend of Rs 10 per share and re-appointment of Ranjit Shahani as a director.
The expanded scope of drug price control order is likely to further impact the company's revenue and operating profit, the company said, adding, “Given the significant impact of drug price control on both revenue and profitability, it will be difficult for the company to mitigate the adverse impact on profit and revenue in the near future.’’
During the quarter, the core business, pharmaceuticals’ total income from operations declined to Rs 150.6 crore (Rs 162.8 crore), while that of its generics business declined to Rs 12.3 per cent, animal health business declined to Rs 23 crore (Rs 25.6 crore and the OTC business grew to 22.8 crore (Rs 19.9 crore).
On the Bombay Stock Exchange on Friday, Novartis rose to a high of Rs 700 before closing at Rs 691.45, a gain of 0.11 per cent.
