Drug companies may take a hit, too

Indian pharmaceutical companies are staring at a possible write-off of their receivables from Sri Lanka, as they are struggling to repatriate money from the South Asian island country which is facing severe dollar crunch and a devaluation of local currency due to ongoing economic crisis.

One of India’s leading drug maker

said it took a charge of around Rs 40 crore in Q4FY22 on its forex line, on account of receivables from Sri Lanka.

“We have the money in Sri Lanka, but we can’t repatriate it because of currency reasons, this is between our subsidiary and us, so our numbers have taken a charge of Rs 40 crore, because the forex rates have changed from the time the money is due to us to the situation now, so those charges will keep coming,” said Umang Vohra, MD and Global CEO of Cipla.

Another executive of a drug company with exposure to Sri Lanka who is facing similar issues, said he is waiting for the government to act quickly so they will be able to continue shipping medicines to Sri Lanka. “The government has announced extending the $1 billion credit line, but we still don’t know how to avail it,” the executive said.

(With inputs from health)