Indoco Remedies (INDOCO) Q4 06/07 earnings summary

Executive summary

• FY07 gross sales reached Rs.34,443 lakh, up 28% YoY; net profit was Rs.4,204 lakh, with export growth and domestic formulations supporting performance.

• Strategic expansion included manufacturing and R&D investments, API capability expansion, and entry into the US market with Ciprofloxacin ophthalmic solution.

Financial highlights

• Gross sales rose 28% to Rs.34,443 lakh; net sales were Rs.32,599 lakh after Rs.1,844 lakh excise duty, versus Rs.24,343 lakh net sales in FY06.

• PBDITA was Rs.6,346 lakh; PBT Rs.4,661 lakh; PAT Rs.4,204 lakh; EPS Rs.35.21, versus Rs.24.01 in FY06 standalone accounts.

• Excluding the differing comparison bases, PAT growth was reported as 34% versus consolidated FY06 and 48% versus FY06 standalone; current-year accounts include amalgamations.

• R&D expense increased to Rs.544.65 lakh from Rs.222.72 lakh; FY07 includes capital spending on the new R&D centre.

Outlook and guidance

• Revenue ambition: Rs.1,000 crore by FY2010; formulations expected to remain the primary growth driver, with APIs and contract R&D supporting the business.

• Plans call for at least 10 ophthalmic generic launches in the US over five years; three ANDAs had been filed and Ciprofloxacin drops were approved, with supplies begun.

• R&D planned to expand from 100 scientists by recruiting 100 more, supporting dossier development, contract research and new drug-delivery systems.