Ever since Japan's Daiichi Sankyo took overRanbaxyBSE -0.69 % from the Singh brothers for $4.6 billion in 2008, profits and sales growth have been hit because of regulatory issues in the US, the world's largest pharma market and a major export destination for it.
Ranbaxy, which once commanded the second or third position among Indian pharma companies by m-cap, has slipped to eighth position and the current m-cap of Rs 14,620 crore is below its average m-cap for 2006 - thanks to regulatory issues with the US FDA which has found fl aws with the company's drug manufacturing process. Even getting an exclusivity period for theLipitor generic two years ago failed to improve the company's long-term prospects.
Ranbaxy is the only Indian drug maker in the top 20 to have given a negative return since 2010. Its peers Sun Pharma, Dr Reddy's Labs, Lupin, Cipla, GSK Pharma and Glenmark Pharma now command richer valuations than its own and have grown much faster. Divi's Lab a contract manufacturing company with revenue of Rs 2,139 crore, a sixth of Ranbaxy's latest revenues, is trading little below Ranbaxy's m-cap.