Financial Daily from THE HINDU group of publications
Thursday, Jan 23, 2003
Financial Daily from THE HINDU group of publications Thursday, Jan 23, 2003 |
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Markets
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Stock Markets Institutions up stake in Ranbaxy Lab Sanjiv Shankaran
CHENNAI, Jan. 22 INSTITUTIONAL investors (both Indian and foreign) have sharply increased their shareholding in Ranbaxy Laboratories over the last 15 months in the backdrop of the US becoming the company's biggest market. Between September 2001 and December 2002, data available with the Bombay Stock Exchange (BSE) indicates that Indian mutual funds increased their stake in the company from 1.93 per cent to 5.31 per cent. Foreign investors (NRIs/Foreign institutional investors/Overseas corporate bodies and Global Depository Receipt holders) have increased their stake in the company from 25.87 per cent to 30.44 per cent during the same period. During the period, the stock has posted a (after adjusting bonus) return of (point-to-point) 48 per cent whereas the BSE Sensex recorded a return of about 21 per cent. The stock currently trading around Rs 650 level on the BSE September 2001 to December 2002 corresponds to the phase when the company's revenue from the US grew sharply. In the last financial year (January-December 2002), the US displaced India as the single largest market. "That would be the main reason", feels Ms. Kavita Thomas, Analyst, SMIFS Securities, on the increase in institutional investor interest. In 2002, Ranbaxy's consolidated sales came to $764 million. Sales in the US grew by 162 per cent over the previous year to register $ 296 million, about 39 per cent of the consolidated sales as against 18 per cent in the preceding year. As sales in the US grew, so did profit. The company's (only the Indian operations) profit after tax in 2002 grew by 139 per cent over the preceding year to Rs 605 crore. A mutual fund manager cited "the huge growth in earnings last year, and also the absence of major disappointments" as reasons for change in shareholding pattern. Elaborating on the underlying reason, Ms. Thomas said, "earlier they were just entering the US market, and gestation periods were long. It was after the launch of Ceftin (an antibiotic launched in 2002) concerns were gradually wiped off".
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