RPG LIFESCIENCE

RPG Life Science, during the quarter sold its surplus land at Navi Mumbai for Rs.77 crore to Maruti Suzuki India. And this alone has helped boost the net profit to Rs.55 crore in Q1FY14, compared to Rs.7 crore in Q4 and Rs.3 crore in previous Q1. But for this land sale, the company would have been in the red. Its profit before this exceptional gain and taxation was at Rs.5 crore. Thus if we do not consider the one-time, post the tax outgo, the company would have actually posted a loss. In Q4 too, there was a tax write back of Rs.4 crore and that helped the company turnaround.

In Q1, its net sale stood at Rs.63 crore, up 14% (YoY). Its raw material cost too seems to have surged substantially at Rs.19 crore, up 46% (YoY).  The company has received a warning from the US FDA for violations of good manufacturing practices at two of its facilities. The news is that FDA might also withhold new approvals for the company until it satisfies the regulator with corrective measures. The company has stated that it has taken corrective steps. The company has stated in the Press Release that it does not expect the FDA to have any impact as it does not export to the USA. But that’s strange because FDA inspects only those facilities which export to USA.