About The Financials of the Company
For the second quarter ended 30thJune 2008 has not been too encouraging. The high interest outgo impacted the bottom lines, nullifying the rise in top line. Its interest outgo for the current Q2 was at Rs.87.95 crore, of which Rs.44.69 crore was on account of exchange rate difference on the foreign currency borrowings. The net profits would have taken a hit but for the adding on of Rs.10.39 crore under exceptional item. The company in Q1 ended 301st March 2008 had accounted for a MTM loss of Rs.27.89 crore, which have reduced by Rs.10.39 crore during current Q2. It entered into hedging Instruments, which are long term in nature to reduce interest cost for the loans, which the Company has taken in past and is outstanding as of June 30, 2008. YoY, the company posted a 48.3% increase in its consolidated sales, at Rs 935 crore for the second quarter ended June 30, 2008.
Positives News On the Counter
1. The company’s US business grew by 128%, which contributes 19% to Wockhardt’s revenues.
2. There were five abbreviated new drug application approvals during this period with a total of 61 products being marketed in the US market.
3. Its European business grew by 30% in the quarter under review.
4. Wockhardt’s domestic business grew by over 20% with its biotech portfolio comprising of Wosulin showing steady sales.
5. As per the Risk Mangement Policy, the company is hedging the interest for 50% of the long term loans.
6. Wockhardt had acquired five companies in Europe, the last being France’s Negma Laboratories in May last year.
About The Stock
Wockhardt has been facing the brunt of this disenchantment and on 10th October touched a new low at Rs.139, continues to languish at these levels. Investors seem to have developed an allergy for pharma stocks, especially thoroughbred Indian pharma stocks.Pharma stocks might take some time to get back the fancy of the investors and no immediate gains are seen in this sector. It is advised to book profit , if the opportunity is availed.
Disclaimer : I do not have any personal holding i this counter.