Shares of Cipla dipped 8% to Rs 558 on the BSE after the pharmaceutical company posted an 11% decline in its consolidated net profit at Rs 3.77 billion for the September quarter (Q2FY19). It had reported a profit of Rs 4.23 billion in the year-ago quarter. The stock recorded its sharpest intra-day fall in since November 7, 2017.
Total revenue from operations has been down 2% to Rs 40.12 billion against Rs 40.82 billion in the corresponding quarter of previous fiscal. EBITDA (earnings before interest, tax, depreciation and amortization) margin down 18.8% from 19.7% in the previous year quarter. Analysts on an average had expected a profit of Rs 4.71 billion on revenue of Rs 43.94 billion for the quarter.
“The company had received various notices of demand from the National Pharmaceutical Pricing Authority (NPPA), Government of India, on account of alleged overcharging in respect of certain drugs under the Drugs (Prices Control) Orders. The total demand against the Company as stated in NPPA public disclosure amounts to Rs 26.10 billion,” Cipla said in a statement.
The hearings scheduled in October 2018 were adjourned to November 2018 as NPPA had not filed reply statements showing the status of compliance by Cipla with the orders of the Hon'ble Supreme court to deposit 50% of the amount demanded, it added.
At 02:33 pm, Cipla was trading 7% lower at Rs 565 on the BSE, as compared to 0.34% decline in the S&P BSE Sensex. The trading volumes on the counter jumped more than three-fold with a combined 9.36 million equity shares changed hands on the BSE and NSE so far.