Novartis succumbed to investor disdain, dropping 4% to Rs 249.30 on Friday, after net profit dipped 30% in Q3 ended 31 December 2002.
The scrip of the pharmaceuticals multinational had earlier hit a low of Rs 245. Around 3,100 Novartis India shares were exchanged on BSE.
Perhaps the market had an inkling that the company's results would turn out poor going by the fact that the scrip fell 2.8% to Rs 260 on Thursday. In fact, from Rs 282.15 on 21 January 2003, the scrip shed 7.8% to Rs 260 on Thursday ahead of the results.
Prior to that, the scrip was the subject of good gains on a firm trend in the overall market. From a low of Rs 201.90 on 31 October 2002, the scrip moved up 39% to Rs 282.15 on 21 January 2002. The rally on the counter also came on the back of rumours that the parent may come out with an open offer at a premium to buy out the entire outstanding stake in NIL.
After trading hours on Thursday, NIL reported a 30% drop in net profit to Rs 12.20 crore (Rs 17.53 crore) for the third quarter ended31 December 2002. Net sales climbed 9% to Rs 136.82 crore (Rs 1.36 billion).
The company said profits were impacted by adverse exchange rate movements, higher product promotional expenses and one-time costs incurred for implementation of new ERP software. The impact was partly offset by income from sale of the Goregaon property during this period. The rupee has been appreciating against the dollar over the last few months.
However, extraordinary income from profit on sale of property at Goregaon did not accrue in Q3, but in the nine months to December 2002. The profit on sale of certain structures and portion of land at the Goregaon site for the nine months was Rs 19.78 crore.
The company said that its performance for the full year will depend on continued sales growth momentum and exchange rate movements. The Drug Price Control Order, as and when introduced by the government, could also impact future performance, it added.
BSE Code: 500672