Cipla's fortunes on Monday took a veritable bow after the company said Friday that Q4 net profit dropped 24%.

The below expected number saw the the scrip of the domestic pharma major plunge 20% to a new 52-week low of Rs 561.10 by 9:58 IST. A total of 22,861 Cipla shares were traded on BSE by then.

After market hours Friday, Cipla said Q4 ended 31 March 2003 net profit fell 24% to Rs 46.73 crore from Rs 61.71 crore in the corresponding period of the previous year. Net sales declined by 2% to Rs 388.15 crore (Rs 3.88 billion) from Rs 394.31 crore (Rs 3.94 billion).

capitalmarket.com projections for the company, in fact, were higher, in the range of Rs 57-63 crore. The net sales number came in on the lower side of analysts' expectations of Rs 384-402 crore (Rs 3.84-4.02 billion).

A key indicator of health, operating profit, slumped 47% to Rs 47.05 crore. Material cost, a major cause for the decline, jumped 12% to Rs 223.45 crore (Rs 2.23 billion). Such was the poor shape of the company that, if it had not been for the rise in other income, the performance for the fourth quarter would have been even worse. Other income, in fact, zoomed up 440% to Rs 11.07 crore.

For the full year ended 31 March 2003, Cipla managed to console with a modest 5% increase in net profit to Rs 247.48 crore (Rs 2.47 billion) on a 12% rise in net sales to Rs 1,572.44 crore (Rs 15.72 billion).

Analysts are disappointed with the overall results and have recommended a `sell' on the counter as the stock seems overvalued compared to its peers. Further, they are put off by the fact that there have been no positive developments of late and don't even expect any new development in the near term. To add to the woes, the company's remaining mum on the status of its non-CFC inhalers (expected to be a major trigger for the company) has kept analysts pessimistic about the company.

Italy's Chiesi Farmaceutici has already stolen a march on the company on the non-CFC inhaler front, as it recently received an approval for selling budesonide-based inhalers, that use ozone-friendly HFA propellants, in Germany. Budesonide is an anti-asthma drug.

Cipla is a leader in the anti-bacterial and anti-asthmatic segments. It offers a variety of asthma drugs like salbutamol, fluticasone, ipratropium and budesonide.

The promoters' holding in Cipla currently stands at 39.94%, while the total foreign shareholding is 34.25%.

BSE code: 500087

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