Novartis India Ltd has posted a net profit of Rs 121.9 m for the quarter ended December 31, 2000 as against Rs 323.80 m for the corresponding period. The turnover in the current quarter stands at Rs 1,141 m as against the figure of Rs 2,340 m in the corresponding period of last year. It must however be kept in mind that the company demerged its agrochemical business in the current year and this accounts for the reduction in the turnover and profits. The company has however not given out the corresponding healthcare figures for the last year.
The other significant development in the current quarter is the management’s decision to exit the lens and lens care business of CibaVision with effect from December 2000. The decision has been made on the ground that the business did not reach a critical mass within a reasonable period of time.
At a recent analysts meet the management had announced plans for introducing four brands Coartem (an anti–malarial), Zometa (anti–cancer), Visodyne (a sight saving product) and Miacalcic (osteoporosis). However, the company’s top brand Voveran (an anti–inflammatory), which contributes almost 18% to Novartis’ turnover, seems to be facing a slowdown, although the management denied it. It’s immuno–suppressant brand Sandimune Neoral (which contributes over 12% to Novartis’ turnover) has also been slapped with a 15% import duty, which has raised its costs by 40%. Overall, we had mentioned that FY01 was likely to be a tough one for Novartis as far as topline growth is concerned.
The stock quotes at Rs 440, which implies an earnings multiple of 28.6x 3QFY01 annualised earnings.
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