Cipla (CIPLA) Q4 09/10 earnings summary

Executive summary

• FY10 sales and other income reached Rs 5,713.24 crore; PBT rose 47% to Rs 1,324.99 crore and PAT rose 39% to Rs 1,081.49 crore.

• Results included Rs 95 crore from the sale of i-pill rights; PBT excluding this exceptional item was Rs 1,229.99 crore.

• Domestic growth was 10%; exports faced raw-material shortages, lower anti-retroviral tender business and adverse FX movements.

Financial highlights

• Net sales were Rs 5,359.52 crore versus Rs 4,960.60 crore; other income was Rs 353.72 crore versus Rs 355.22 crore.

• Material costs were Rs 2,452.98 crore, employee costs Rs 318.87 crore, R&D expenses Rs 250.69 crore and depreciation Rs 165.25 crore.

• Net cash from operating activities was Rs 1,041.68 crore versus Rs 375.59 crore; year-end cash and bank balances were Rs 60.84 crore.

• EPS was Rs 12.49 before exceptional items and Rs 13.69 after exceptional items, versus Rs 9.99 in FY09 on both bases.

Outlook and guidance

• Domestic strategy targets growth in trade channels, hospitals and institutions, leveraging new products, therapeutic breadth and brand value.

• Export plans focus on off-patent generics, strategic partners and more than 6,000 product registrations across 170+ countries.

• Indore SEZ formulations production began in April 2010; further investment covers Vikhroli R&D, Bengaluru and Patalganga API capacity, and biosimilar facilities.

• Technology transfer remains a focus; FY10 income from technical consultancy services was Rs 154 crore.