Ipca Laboratories was given the cold shoulder by the market on Friday as a key bulk drug manufactured by the company was made cheaper by the NPPA.

The scrip of the domestic pharma company was dragged down 3.90% to Rs 170.10 by 12:45 IST. A total of 6,315 Ipca Laboratories shares changed hands on BSE by then. In the 13 sessions between 24 January and 12 February 2003, Ipca Labs lost 17.30% to Rs 177 from Rs 208.

The National Pharmaceutical Pricing Authority (NPPA) has announced a cut in the prices of anti-malarial bulk drug chloroquine phosphate by Rs 80 per kg or 9.2% from Rs 870 per kg to Rs 790 per kg. Ipca is the largest manufacturer of chloroquine phosphate in the country.

The revised prices are effective within 15 days of the date of notification, viz, 11 February 2003.

Today's selling in Ipca seems a knee-jerk reaction to the NPPA action. However, analysts feel the price cut is not going to have any major impact on the company's financials. What seems more telling as far as the counter is concerned, is the uncertainty over a war between the US and Iraq.

Incorporated in 1949 in Mumbai, Ipca Laboratories was taken over by the present management in 1975, when its total turnover was around Rs 5.4 million. Since then, it has recorded continuous growth to reach its present stature as a large pharmaceuticals company.

Over 60% of the company's turnover comes from speciality formulations such as anti-malarials, anti-emetics, anti-hypertensives, antibiotics and other drugs. The balance comes from bulk drugs, drug intermediates, generic formulations, hospital products, etc. It is the largest Indian manufacturer of the anti-malarial bulk drug -- chloroquine phosphate.

Ipca, a government-recognised trading house, exports to over 77 countries, mainly to Australia, Canada, Ethiopia, Germany, Italy, Japan, Srilanka, the US, the UK, Yemen, etc. Ipca plans to set up a new bulk drugs and drug intermediates manufacturing unit near Baroda, Gujarat.

For the quarter ended 31 December 2002, Ipca recorded a 115.4% rise in net profit to Rs 15.94 crore on a 7.64% increase in net sales to Rs 123.48 crore (Rs 1.23 billion) in DQ 2001.