Paracetamol maker Granules India' Q1 profit hurt by cyber attack disruptions
A pharmacist checks weight of Paracetamol, a common pain reliever also sold as acetaminophen, tablets inside a lab of a pharmaceutical company on the outskirts of Ahmedabad, India, March 4, 2020. REUTERS/Amit Dave/File Photo Acquire Licensing Rights
HYDERABAD, Aug 9 (Reuters) - Granules India Ltd (GRAN.NS), the maker of paracetamol and ibuprofen pain relievers, reported a 62.5% fall in first-quarter profit on Wednesday, as a cyber security incident significantly disrupted operations.
The generic drug maker's consolidated net profit tumbled to 478.9 million rupees ($5.8 million) in the April-June quarter, from 1.27 billion rupees a year earlier.
Granules faced a cyber security attack in May, which caused major disruptions in its operations, affecting its IT assets. A ransomware group has claimed responsibility, the company said.
"(It) took considerable time to address the regulatory expectations, qualifications, fine-tuning of quality and production systems. This has impacted significantly the revenue and profitability for the quarter," Granules said.
Revenue from operations fell 3.3% to 9.85 billion rupees.
"Operating expenses were higher, in line with the expected revenue, and hence the gap in sales had a severe impact on PAT," said Chairman and Managing Director Krishna Prasad Chigurupati.
He said business has been restored to normal.
The fall in profit also comes as generic drug makers grapple with intense price competition in the U.S. and Europe from where they draw a bulk of the revenue.
Granules specialises in manufacturing active pharmaceutical ingredients (API), pharmaceutical formulation intermediates (PFI) and finished dosages (FD).
Granules, which holds a 30% share of the global market for paracetamol, manufactures the drug's API and also finished dosage, ready for consumption, in European markets.
Revenue from the finished dosage segment, its biggest, fell 2.1% to 5.37 billion rupees, while the API segment, its second-largest, rose 28.1% due to strong paracetamol volumes, the company said.
Shares of the company closed 0.22% lower at 322.40 rupees.($1 = 82.8220 Indian rupees)
Reporting by Rishika Sadam in Hyderabad; Editing by Savio D'Souza
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