Forbes India — November 17, 2017

June this year, on reports of an observation
by the US Food and Drug Administration
(US FDA) about its plant in Pithampur,
Madhya Pradesh. This year, the company
also got observations for its Goa plant from
the US drug regulator. Lupin reported a
near-60 percent fall in consolidated net
profit to `358.06 crore for the quarter ended
June 2017, which had analysts maintain
an ‘underperformer’ rating for the stock.

MURALI DIVI
-$860 mln (30.7%)
Rank 77  36 places
As with most in this section, Murali Divi, 66, is
one more pharmaceutical entrepreneur who
has witnessed a sharp erosion in wealth at
a time when business cycles for Indian drug
companies have turned weak and several of
them have reported poor earnings growth
in recent quarters, hit by global regulatory
concerns. The Divis Laboratories stock,
which had gained rapidly in 2015-16, has
been on a consistent slide in value to a low
of 546 in May 2017, against a level of1,
on December 19, 2016. The stock clawed
back a bit in the August-September 2017
period to `969 levels, but slid again after
US FDA issued a Form 483 notice to the
company for its unit at Visakhapatnam,
indicating violations against the Federal
Food, Drug, & Cosmetic Act. The promoter
family held a 52 percent stake in the
company as of September 2017.

REDDY FAMILY

-$620 mln (28.8%)

Rank 97  43 places

The fortunes of India’s second largest

drug maker, Dr Reddy’s Laboratories, were

impacted by the actions of the regulatory

authority of Germany, which found six

major observations at a formulations plant

at Duvvada in Visakhapatnam; it also

refused to renew the good manufacturing

practice for another plant in Bachupally

in Hyderabad. The company, in which the

promoters, including late founder K Anji

Reddy’s wife Samrajyam Reddy Kallam, his

son Satish Reddy, daughter Anuradha and

son-in-law GV Prasad, own a 26.78 percent

stake, has said that it plans to submit a

corrective and preventive action plan to the

authorities. The company’s earnings in the

first quarter of FY18 have been impacted due

to higher-than-expected price erosion in the

US while domestic business was impacted by

the introduction of the Goods & Services Tax.

DILIP SHANGHVI & FAMILY

-$4.8 bln (28.4%)

Rank 9  7 places

Pharma tycoon Dilip Shanghvi, 61, who

founded Sun Pharmaceuticals, this year was

the biggest loser in wealth in dollar terms

(down $4.8 billion), hurt by weak earnings.

This contrasts sharply against the heydays

of 2014 to 2016, when he was India’s second

richest man. Sun Pharma reported a first

quarterly loss in at least four years—of ` 425

crore ($66 million) in the quarter ended

June 2017. This was on account of settling a

one-time legal case in the US. The pharma

company also now awaits the reinspection

of its Halol facility in Gujarat by the US FDA,

after completion of remedial activities. Even

as the global headwinds for international

pharma trade are strong, Shanghvi has said

that they have identified a speciality segment

which could boost growth in the coming

years and help the company climb up the

value chain, and restore its flagging fortunes.

Gv prasad (left) and satish reddy

Murali divi

dilip shanghvi

december 29, 2017 forbes india | 17

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