MUMBAI (NewsRise) -- Cipla reported a better-than-expected fourth-quarter net income as new product launches in the U.S. helped the Indian drugmaker offset a slowdown at home and weaker business in Africa.
Cipla is seeking to boost its sales in the U.S. which accounts for about a fifth of its revenue. In comparison, larger rivals such as Sun Pharmaceutical Industries and Dr. Reddy's Laboratories generate as much as 40% of their sales from the world's biggest drug market. Most Indian pharmaceutical companies are grappling with cutthroat price competition the U.S., where the Food and Drug Administration has expedited its approval rate for generics, paving the way for increased competition.
Consolidated net income for the three months ended March 31 more than doubled on-year to 3.67 billion rupees ($52.7 million), Cipla said in a statement. Analysts were expecting a net income of 3.09 billion rupees, according to Refinitiv data.
Revenue grew 19% to 44.04 billion rupees, driven by a 53% jump in North American sales.
Sales in India rose 11%, while that in South Africa fell 3%. Sales in South Africa and the sub-Saharan Africa region have been declining due to funding constraints and intense competition.
"Our planned build-up of respiratory pipeline in the U.S. remains on track," Umang Vohra, managing director and chief executive of Cipla said in the statement. "From a sustainable growth and direction perspective, we are well-poised for FY20."
The drugmaker is also looking to tighten costs through product rationalization and streamlining its manufacturing network. The company, which had acquired two drugmakers in the U.S. -- Invagen Pharmaceuticals and Exelan Pharmaceuticals -- for $550 million in 2016, exited certain low-margin products from that portfolio.
Earlier this month, rival Lupin, India's third-largest drugmaker, swung to a profit in the fourth-quarter on the back of the launch of an exclusive drug.
Cipla shares fell 0.84% in Mumbai trading, while the benchmark S&P BSE Sensex gained 0.4%.
--Dhanya Ann Thoppil