Divi’s Laboratories (DIVISLAB) Q4 06/07 earnings summary

Executive summary

• FY07 net sales rose 90% YoY to Rs 72,442 lakh; PAT increased 172% to Rs 19,175 lakh, supported by growth in custom synthesis and generics.

• Exports contributed 93% of turnover, with Europe and North America accounting for 75% of business; the newly commissioned SEZ began commercial operations in October 2006.

Financial highlights

• Standalone net sales were Rs 72,442 lakh versus Rs 38,111 lakh; total income reached Rs 73,803 lakh versus Rs 39,174 lakh.

• Standalone PBDIT increased 104% to Rs 25,961 lakh; PBT rose 112% to Rs 22,670 lakh and PAT grew 172% to Rs 19,175 lakh.

• Consolidated net sales were Rs 72,458 lakh, PBT Rs 21,923 lakh and PAT Rs 18,586 lakh; consolidated basic EPS was Rs 144.95.

• Standalone basic/diluted EPS was Rs 149.54/Rs 147.77; interim dividend was Rs 10 per share, with a 7% profit payout.

• Employee stock-option expense was Rs 2,411 lakh; fair-value pro forma PAT was Rs 18,842 lakh and adjusted basic/diluted EPS Rs 146.95/Rs 145.21.

Outlook and guidance

• Nutraceutical project at the SEZ, with estimated investment of Rs 3,500 lakh, was expected to complete by mid-FY08; European and US marketing operations were expected to expand with its commencement.

• European subsidiary management anticipated stronger sales in the next fiscal after customer product testing and market-seeding activity.