Divi’s Laboratories (DIVISLAB) Q4 03/04 earnings summary

Executive summary

• FY04 net sales rose 23% YoY to Rs 30,283.14 lakh; PAT increased 33% to Rs 7,284.31 lakh.

• Unit 2 operations stabilized; exports generated 88% of turnover, with Europe and America contributing 59% of business.

Financial highlights

• Total income was Rs 31,728.29 lakh vs Rs 25,972.07 lakh; PBT reached Rs 10,196.25 lakh vs Rs 6,932.66 lakh.

• EBDIT was Rs 11,856.85 lakh vs Rs 8,264.33 lakh; finance charges fell to Rs 336.39 lakh from Rs 444.94 lakh.

• PAT was Rs 7,284.31 lakh vs Rs 5,490.34 lakh; absolute EPS increased to Rs 56.83 from Rs 42.83.

• Other income was Rs 1,445.15 lakh; export benefits contributed Rs 1,036.68 lakh, down from Rs 1,093.41 lakh.

Outlook and guidance

• 12 US FDA Drug Master Files had been filed; plans called for ~20 DMFs over the next few years, with four APIs also holding European COS.

• May 2004 US FDA inspection concluded without comments or observations and included pre-approval review for Levetiracetam.

• Management saw sourcing opportunities as major generic makers in advanced markets sought independent API suppliers; full Indian WTO patent compliance was due from 2005.