NPIL net up 63% on custom manufacturing growth

MUMBAI: Mumbai-Based pharmaceutical company Nicholas Piramal India (NPIL) has posted a 62.5% growth in net profit to Rs 87.3 crore in the second quarter ended September on the back of strong growth of its custom manufacturing (CMG) business. Consolidated net sales were up 16.8% to Rs 764.6 crore, compared with Rs 654.7 crore in the same quarter last year.

The company’s CMG business, which now accounts for close to 45% of overall revenues, witnessed a 22.2% growth to Rs 342.3 crore. In a bid to grow its CMG business, the company had acquired Pfizer’s Morpeth facility for around $50 million in June 2006, and UK’s Avecia Pharmaceuticals for $25 million in October 2005. However, this quarter growth was mainly driven by the company’s Indian business, which recorded a 300% growth to Rs 69.4 crore.

“We commenced last quarter shipment for a significant new customer, which counts among the top five largest pharma companies in the world, and we expect to be able to sustain this level of growth for this business, going forward,” said company chairman Ajay Piramal. After a slump in sales last quarter due to a supply shortage of codeine, NPIL’s domestic formulation business witnessed good growth this quarter, as sales rose 13% to Rs 354.3 crore. This is compared to 12.4% market growth, according to ORG-IMS.

NPIL’s diagnostic business, Wellspring (Pathlabs), which includes Drs Tribedi & Roy Diagnostic Laboratories in Kolkata and Dr Phadke Pathology Laboratory & Infertility Centre, recorded revenues of Rs 31.2 crore, up 76.9% compared with Rs 17.6 crore in the same quarter last year.

NPIL recently announced the demerger of its discovery research division into a separate company with effect from April 1, 2007. The company will issue one share of the new company for every ten of the parent company. It will transfer Rs 95 crore of assets to the new chemical entity.

“We are not looking at allotting shares on a preferential basis before the listing,” said Mr Piramal. The company has a pipeline of 13 experimental drugs across the oncology, inflammation, anti-diabetes and anti-infective segments in various stages of development. NPIL’s shares were up 2.51% at 285.8 on BSE on Thursday.