Divi’s Laboratories (DIVISLAB) Q4 04/05 earnings summary

Executive summary

• FY05 net sales rose 15% YoY to Rs.34,737.83 lakhs; PAT fell to Rs.6,603.12 lakhs from Rs.7,284.31 lakhs, reflecting higher material costs, taxes and delayed custom-synthesis sales.

• Exports accounted for 88% of turnover, with Europe and America representing 62% of business; the product portfolio covered about 90 products.

Financial highlights

• Total income increased to Rs.36,452.48 lakhs from Rs.31,728.29 lakhs; PBDIT rose to Rs.12,167.99 lakhs from Rs.11,856.85 lakhs, while PBT was Rs.10,231.42 lakhs versus Rs.10,196.25 lakhs.

• PAT was Rs.6,603.12 lakhs versus Rs.7,284.31 lakhs; basic/diluted EPS was Rs.51.51 versus Rs.56.83.

• Other income rose to Rs.1,714.65 lakhs, including Rs.660.42 lakhs from contract research and Rs.903.02 lakhs from export benefits; export-benefit income fell from Rs.1,036.68 lakhs as DEPB rates were reduced.

• Current tax provision was Rs.3,300 lakhs, deferred tax Rs.274.48 lakhs and prior-year tax adjustment Rs.53.82 lakhs; total tax provision was Rs.3,628.30 lakhs.

Outlook and guidance

• US FDA DMF filings were expected to rise from 19 to about 25 by year-end; work continued on 15 future-generic compounds and four APIs had European COS certification.

• A Rs.35 crore export-oriented unit at Unit 2 was being developed to commercialize a specialty ingredient for a large MNC customer.

• Global therapeutic peptides were valued at about $1 billion and forecast to double by 2010; carotenoids had reached commercial-scale development but had yet to realize their potential.