Cipla to ‘simplify’ business in emerging markets, Europe

Drugmaker Cipla will continue to simplify its business and focus on overseas markets, its top management said while outlining the company’s strategy for the year ahead.

Umang Vohra, Cipla’s Global Chief Operating Officer, said here on Tuesday that market rationalisation would continue in emerging markets and Europe. The business in Europe will see a change, from a direct-to-market approach to a business-to-business approach, he said.

In emerging markets, it will evaluate regions it would not want to operate in due to size and the complexity involved, he told analysts while discussing the company’s performance in the last quarter and year.

Simplification and focus on the core 15-20 markets, he said, would be the road ahead to streamline resource allocation.

And in that direction, the company had incurred one-time costs in terms of inventory and people, he added. Cipla clocked a net profit of ₹81 crore for the three months ended March 31, 2016, against ₹343 crore in the corresponding quarter last year. Total income stood at ₹3,266 crore (₹3,106 crore).

The company said its performance for the two quarters and the year are not comparable as the latest period includes acquisitions made earlier this year.

In February, Cipla had acquired two US-based companies, InvaGen Pharmaceuticals and Exelan Pharmaceuticals.

For the year ended March 31, 2016, Cipla’s net profit stood at ₹1,505 crore, while its net profit in the previous year stood at ₹1,180 crore.

Total income for the year stood at ₹13,678 crore (₹11,345 crore).

The company’s domestic business, which contributed 40 per cent to its revenues, grew about 6 per cent to ₹5,111 crore during FY15-16, up from ₹4,825 crore in the previous year.

Its exports of finished medicine forms increased 38 per cent to ₹7,483 crore (₹5,422 crore).

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