Ranbaxy

Ranbaxy Labs posted a set of dismal numbers for fourth quarter ended 31st Dec 2012. Higher raw material costs, lower sales and product recall, all together pulled down the bottomline of the company. Its consolidated net sales dipped 29% (YoY) at Rs.2671 crore. EBIDTA fell 83% at Rs.158 crore and net loss for the quarter was at Rs.492 crore. During the quarter, it has made a voluntary recall of Atorvastatin Calcium tablets from the US market.

The company ended the year with a 23% rise in topline at Rs.12253 crore and EBIDTA improved 20% at Rs.2211 crore. It ended the year with a net profit at Rs.923 crore v/s net loss of Rs.2900 crore and that was due to provision of Rs.2,648 crore for settlement in the previous year for resolution of potential civil and criminal allegations by Department of Justice of the USA. When one looks at the entire year numbers, it is apparent that its sales growth was one of its best but recall of atorvastatin in the US market for Q4 is what pulled down the overall numbers.  But the cheer in the stock is that the company this week announced that three and half months after it recalled generic Lipitor from the American retail market, it has finally resumed production for supply to the US market. It had been recalled on fears that it might contain glass particles but the company has now informed that it is working with the USFDA and the company has identified and implemented multiple corrective and preventive actions. This to some extent will help shore up the margins once the approvals come through.