Wockhardt Ltd., an Indian drugmaker that gets about 60 percent of its revenue from overseas, fell in Mumbai trading after announcing a 23 percent decline in first- quarter profit because of losses on derivatives.
The company, based in Mumbai, dropped as much as 4.1 percent.
The drugmaker was forced to report derivatives losses a month after denying it faced charges on the contracts, following the tightening of disclosure rules. The rupee fell for the first quarter in seven in the period, triggering losses at exporters and companies with overseas debts that had bet on a continued rally in the currency.
Net income declined to 509 million rupees ($13 million) in the three months ended March 31 from 663 million rupees a year earlier. Revenue gained 50 percent to 7.86 billion rupees.
The company incurred 279 million rupees of losses on derivatives it had taken out on its overseas debt, Wockhardt said.
Derivatives are financial instruments used for speculation and as insurance against fluctuations in the markets. Their value is based on prices for currencies, stocks, bonds, loans and commodities, or linked to events such as changes in foreign exchange rates.
Wockhardt dropped 7.7 rupees, or 2.5 percent, to 297 rupees at the 3:30 p.m. local time close on the Bombay Stock Exchange.
Link to the article: http://www.bloomberg.com/apps/news?pid=20601091&sid=achVBdBw_YlE&refer=india
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