Ranbaxy Laboratories cuts losses but challenges remain

Pharma major Ranbaxy Laboratories may have posted a sharp fall in net loss in its fourth quarter ended December 31, 2013, but analysts feel it is too early for the company to rejoice.

The drugmaker on Wednesday reported a net loss of Rs 159 crore in the October-December period. Ranbaxy had incurred a loss of Rs 492 crore in the year-ago period.

The improved figures come after the US Food and Drug Administration (USFDA) prohibited manufacturing and distribution of the active pharmaceutical ingredients (API) from its Toansa facility. It is the fourth plant of the company after Mohali, Dewas and Poanta to receive USFDA's import alert.

Analysts point out that despite the fall in net loss, challenges still remain.

"We will still have to wait to see the real impact of the import curbs imposed by the USFDA. It is an evolving cost and will start getting reflected from the next quarter," says Sarajit Pal, analyst at Prabhudas Lilladher.

Ranbaxy Laboratories saw its shares rise 5.69 per cent to Rs 340.05 on the Bombay Stock Exchange on Wednesday.