By Kashish Tandon and Rishika Sadam
BENGALURU/HYDERABAD (Reuters) - Cipla, India's third-largest generic drug maker by sales, reported a better-than-expected quarterly profit on Friday, driven by strength in its core domestic and North American businesses.
The results come at a time when Cipla's founding family is looking to sell its 33.4% stake in the pharmaceutical company. However, Cipla CEO Umang Vohra downplayed talks on the deal.
"The promoters are one entity and the company is another. We have not heard anything about the transaction so far," Vohra told a press conference.
Reuters reported last month that rival Torrent Pharmaceuticals was in talks with private equity funds to raise up to $1.5 billion to bid for the drugmaker.
Amid deal talks, Cipla's healthy quarterly results raised hopes for the broader pharmaceutical sector in the country, which is the world's largest supplier of low-cost generic drugs.
Consolidated net profit rose 43.4% to 11.31 billion rupees ($135.90 million) in the second quarter, beating analysts' average estimate of 9.75 billion rupees, according to LSEG data.
"Cipla's strong numbers have set a positive tone for big pharma results for the rest of the quarter," said Shrikant Akolkar, analyst at Asian Markets Securities.
Total revenue from operations increased almost 15% to Rs 66.78 billion. Sales in North America increased almost 32%, while those in India and South Africa increased 10% and 3.7%, respectively.
CEO Vohra attributed the strong sales growth in North America to higher demand and growing market share for Lanreotide injection - used to slow the growth of tumors - and the asthma drug Albuterol.
According to analysts, the company's domestic sales increased due to price increases and the addition of medical representatives.
Peer Dr Reddy's Laboratories also reported quarterly results above analysts' expectations, boosted by strong US sales of its generic version of the popular cancer drug Revlimid.
Cipla shares closed up 2.03% on Friday following the results. They have risen nearly 17% in the September quarter, outpacing a 12% rise in the Nifty Pharma index.
($1 = 83.2210 Indian rupees)
(Reporting by Kashish Tandon in Bengaluru and Rishika Sadam in Hyderabad; Editing by Eileen Soreng)
