A sharp increase in interest costs has caused Glenmark Pharmaceuticals to post a consolidated net profit of Rs 80.9 crore for the second quarter, 31 percent lower than the Rs 117.3 crore for the previous corresponding quarter.
Glenmark's consolidated revenue for the quarter rose 5.5 percent at Rs 590.3 crore, as against Rs 559.7 crore in the same quarter last year.
The company, with a debt burden of about Rs 1,900 crore, had to earmark Rs 45.6 crore as interest costs for the quarter, whereas this was Rs 18.7 crore in the previous corresponding quarter. Depreciation costs also increased from Rs 22.5 crore in the previous corresponding quarter to Rs 36.2 crore. The company had recently raised Rs 400 crore through a qualified institutional placement issue and this will help to reduce interest costs by Rs 7-10 crore in the next quarter, said company sources.
"Sales growth across most regions for the quarter has improved. The India formulations business and the US generics business, the two largest for the group, performed well during the quarter," said Glenn Saldanha, chief executive and managing director.
Sales for the formulation business in India increased to Rs 184.2 crore for the second quarter, as compared to Rs 155.9 crore in the previous corresponding quarter, a growth of 18 per cent. For the second quarter, revenue from Africa, Asia and the CIS region was Rs 80.2 crore, an increase of 14 per cent as against the previous corresponding quarter.
Sales of its US subsidiary, Glenmark Generics, remained flat at Rs 177.1 crore for the second quarter, as against a revenue of Rs 176.1 crore. For the remaining part of the year, Glenmark expects demand conditions to further improve across all operating regions. While the US Generics and the India formulations business should continue to grow, the remaining regions are also expected to register good growth rates, said Saldanha.
