Divi’s Laboratories (DIVISLAB) Q4 02/03 earnings summary

Executive summary

• FY03 sales rose 19.06% to Rs. 24,651.97 lakh; PAT increased 50.12% to Rs. 5,490.34 lakh, or 27.16% excluding the prior-year R&D write-off effect on comparability.

• Commercial production began at the Chippada Unit II on 1 March 2003; exports were 91% of turnover, with Europe and America contributing 64% of business.

Financial highlights

• Total income reached Rs. 25,972.07 lakh vs Rs. 22,025.03 lakh; other income was nearly flat at Rs. 1,320.10 lakh.

• PBDIT grew 44% to Rs. 8,264.33 lakh; PBT was Rs. 6,932.66 lakh vs Rs. 4,230.59 lakh.

• Finance charges fell to Rs. 444.94 lakh from Rs. 704.59 lakh; depreciation rose to Rs. 886.73 lakh, including Rs. 38.73 lakh for Chippada commercial operations.

• Tax provision was Rs. 1,222.65 lakh plus deferred tax liability of Rs. 219.67 lakh; higher current tax reflected phased withdrawal of export tax benefits.

• Board recommended a Rs. 6/share dividend vs Rs. 5/share; proposed payout was Rs. 769.12 lakh plus Rs. 98.54 lakh dividend tax.

Outlook and guidance

• Priorities include custom synthesis and contract manufacturing for large pharma, with intent to expand this business over the next few years.

• Management expected continued growth from peptides; Naproxen, Dextromethorphan HBr and CIS Lactum were identified as opportunities, while Iopamidol was steady with growth potential.

• Chippada was initially intended for intermediates; APIs for regulated markets were planned after approvals, targeted within 2–3 years.