A weak rupee has dragged down the consolidated net profit of biotech major Biocon by 54% in the September quarter
Biotech major hedged its currency risk at Rs 41.50 till March 2009
BANGALORE: A weak rupee has dragged down the consolidated net profit of biotech major Biocon by 54% in the September quarter to Rs 25.02 crore from Rs 53.97 crore a year ago. The Bangalore-based company’s mark-to-market (MTM) loss for the quarter was Rs 25.45 crore.
M B Chinappa, head (finance) of Biocon’s subsidiary Syngene, said the company’s forex losses were due to the currency hedge that it has taken for the whole year at Rs 41.50 per dollar. On Thursday, the value of the Indian rupee was Rs 48.82 per dollar.
“Currently, there is tremendous weakness in the rupee. Therefore, unless the situation reverses, it could get worse for us since we have hedged our currency risk at Rs 41.50 per dollar till March 2009,” said Chinappa.
An October 13 report by Morgan Stanley analysts Vipin Khare and Gaurav Rateria said broking house economists have predicted that the rupee would peak at 57 per dollar by June 2009.
Such a softening of the rupee could further hit the profits of the bio-pharma company. Without the forex losses, Biocon’s net profit for the quarter slipped by only 5%.
The company’s consolidated net sales were up 66% at Rs 439.2 crore from Rs 278.9 crore last year. For the first half (H1), the biotech company posted a net profit of Rs 40.06 crore, a 62.49% drop from Rs 106.80 crore in the same period last fiscal.
Kiran Mazumdar Shaw, chairman, Biocon Ltd, said, “Biocon’s H1 F09 performance has shown resilience despite being impacted by rupee volatility, which has seen us make mark-to-market provision of Rs 60 crore.” The company’s net sales for the first half of this fiscal stood at Rs 703.23 crore, up from last year’s Rs 517.66 crore.
For the second quarter, Syngene saw a healthy sequential growth of 21% and a year-on-year (yoy) growth of 9%. “At a time when global businesses are challenged by an economic downturn, we believe that our strong financial base gives us a significant advantage,” said Shaw.
p_sharma@dnaindia.net
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