Divi’s Laboratories (DIVISLAB) Q4 10/11 earnings summary

Executive summary

• FY11 net sales reached Rs.1,305.44 crore, up 41% YoY; PAT rose 27% to Rs.435.57 crore, with growth across business categories and stronger performance in H2.

• Exports were 93% of turnover versus 91% in FY10; customer inventory destocking had ended, supporting normalized ordering across the product portfolio.

Financial highlights

• Total income was Rs.1,344.04 crore versus Rs.959.98 crore; PBDIT was Rs.534.58 crore versus Rs.442.55 crore, up 21%.

• PBT rose 23% to Rs.479.05 crore; PAT increased 27% to Rs.435.57 crore from Rs.344.20 crore.

• Basic EPS was Rs.32.90 versus Rs.26.40; diluted EPS was Rs.32.88 versus Rs.26.35.

• Consolidated PAT was Rs.429.27 crore versus Rs.340.33 crore; consolidated basic and diluted EPS were Rs.32.42 and Rs.32.41.

Outlook and guidance

• The Rs.200 crore DSN SEZ facility began trial runs in Q1 FY12 and was expected to start commercial operations early in FY12.

• DSN SEZ export profits were expected to qualify for 100% tax exemption for five years from April 2011; the existing SEZ qualified for 50% exemption over the next five years.

• Capacity optimization and expansion were planned to address generic and custom-synthesis opportunities, with an innovator-complementary and non-compete approach to customers.