Thursday, August 12, 2010

Ranbaxy profit beats estimate: Company would get new CEO

On August 12, 2010, Ranbaxy Laboratories Ltd., announced the departure of its current Managing Director & CEO, Atul Sobti. It will be effective from August 19, 2010. Sobti remained MD and CEO for more than a year. No specific reason of his departure had been mentioned. Arun Sawhney, the current president of Ranbaxy’s global pharmaceutical business, will take over as managing director.

This is the second major reshuffle of Ranbaxy since 2008, after Japanese drug maker, Daiichi Sankyo, took over Ranbaxy.

On the same day, the company also announced the financial result of its second quarter for FY 2010. For the fifth straight quarter, the company posted better profit than analysts’ estimates. In an analyst poll conducted by Reuters, the average forecast profit was Rs.944 million.

Ranbaxy posted a consolidated net profit of Rs.3.26 billion against Rs.6.93 billion at the same period last year. Ranbaxy posted losses for three consecutive quarters to March 2009 due to currency fluctuations and a ban by the U.S. government on some of its products. Share prices of Ranbaxy, which has a market value of $4 billion, dropped 13.6 percent this year.

Ranbaxy is the largest pharmaceutical company in India in terms of sales. In 2008, Japanese drug maker, Daiichi Sankyo, acquired 64% stake in the company along with the 35% equity stake held by the founder family.

Daiichi Sankyo then asked Malvinder Singh to continue as CEO and MD of the company and even made him the chairman of the company and a member of the ‘Senior Global Management’ team of Daiichi Sankyo but in May 2009, Mr. Singh resigned before the end of his five year term taking $10 million as severance package. Mr. Singh was followed by Atul Sobti who was supposed to serve as CEO and MD till May 2012.

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