Glenmark Pharmaceuticals (GLENMARK) Q4 04/05 earnings summary

Executive summary

• Consolidated FY05 revenue rose 60.79% YoY to Rs 6,120.53m; PAT increased 159.21% to Rs 1,071.41m, with NCE milestone payments driving most of the profit increase.

• Generics profit grew only marginally YoY; expansion in regulated markets, research, manufacturing and sales networks increased costs while building future capacity.

Financial highlights

• Consolidated PBIDT reached Rs 1,609.80m vs Rs 725.73m; PBT was Rs 1,272.94m vs Rs 514.23m, and PAT was Rs 1,071.41m vs Rs 413.34m.

• Consolidated turnover was Rs 6,120.53m vs Rs 3,806.61m; other income was Rs 52.29m vs Rs 34.66m.

• Standalone gross revenue increased 41.26% to Rs 5,419.17m; operating profit before interest, depreciation and tax rose 61.45% to Rs 1,186.50m.

• Consolidated operating cash flow was Rs 144.07m; investing cash outflow was Rs 1,910.44m, offset by financing inflow of Rs 2,966.21m.

Outlook and guidance

• FY06 targets: revenue growth of ~40% and net profit growth of 100% over FY05.

• Domestic formulations target more than 10% revenue growth in FY06, with higher volume and profit growth.

• FY06 plans include 14 ANDAs and 14 DMFs, Baddi plant commissioning, API capacity expansion and construction of a new API facility.

• GRC 3886 Phase II trials were expected in early 2006; GRC 8200 Phase I was targeted for Q2 FY06, alongside clinical trials for another PDE-4 candidate.

• Plans included 5–6 US product launches by March 2006, 250–300 additional overseas product dossiers and selective acquisitions in Europe and developing markets.