Novartis plunged a solid 13.29% to Rs 229 on turning out an unsavoury 93% drop in net profit for the quarter ended 31 March 2003.
By 9:59 IST, the stock of the pharmaceuticals company registered volumes of 10,841 shares on BSE.
On Monday, Novartis said that fourth quarter ended 31 March 2003 net profit plunged 93% to Rs 1.32 crore compared to Rs 19.2 crore in the corresponding period of the previous year. Total income dropped 33% to Rs 86.13 crore from Rs 127.99 crore in MQ 2002.
The poor results were due to the confusion over the implementation of value-added tax, which resulted in traders refusing to lift stocks. Lower sales growth, adverse exchange rate movements and a higher depreciation charge for a manufacturing facility also contributed to the fall in profits.
For FY 2002-03, the company posted a 5% drop in net profit to Rs 62 crore (Rs 65.3 crore) on a 3.06% increase in total income to Rs 511.97 crore (Rs 496.74 crore). The company has recommended a dividend of 150% (Rs 7.50 per equity share of Rs 5 each) for the year ended 31 March 2003.
The fall in the scrip is also attributed to the low price recommended by the company for its proposed buy-back (at Rs 250 per share) through the stock exchange route. The maximum outlay for the buy-back is Rs 60.86 crore. In fact, the market price of the scrip at Rs 264.10 is higher than the offer price.
As on 31 March 2003, the promoters held 50.93% stake in Novartis, while the public and institutions held 25.21% and 16.75% respectively.
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