Ranbaxy Laboratories Ltd., India’s largest drugmaker, reported an unexpected loss in the second quarter, dragged by a decline in the rupee.
The loss in the three months to June narrowed to 5.24 billion rupees ($85.6 million) from 5.86 billion rupees a year earlier, Ranbaxy said in a statement. That compared with the median estimate for a 1.29 billion rupees profit. Sales dropped 18 percent to 26.3 billion rupees from 32 billion rupees a year earlier, it said.
Ranbaxy, struggling with charges over the safety of its drugs, had a loss of 3.67 billion rupees in the quarter because of the decline in the rupee. India’s currency has declined about 11 percent this year against the dollar and is the worst-performing currency in Asia after Japan.
The rupee’s decline adversely affected profitability because of “accounting standards that require marking-to-market the entire derivatives and foreign currency denominated loans,” the company said in a statement. “The macro economic environment continued to be challenging in certain countries in Western Europe,” Ranbaxy said.
The shares rose 4.3 percent to 281.5 rupees at 3:30 p.m. close in Mumbai before the announcement. The stock has fallen 44 percent this year, compared with a 3.9 percent drop in the benchmark S&P BSE Sensex.