Indoco Remedies (INDOCO) Q4 07/08 earnings summary

Executive summary

• FY08 covered 9M, July 2007–March 2008, after the year-end changed to March 31; reported turnover was Rs 271.89 crore, up 16% YoY on a comparable-period basis, and PAT rose 50% to Rs 30.10 crore.

• Improved production output and cost rationalization supported results; domestic and international business both grew. Prior-year full-year figures are not directly comparable with the current 9M period.

Financial highlights

• Gross sales before excise were Rs 271.89 crore; net sales were Rs 262.68 crore. PBT was Rs 32.04 crore and PAT Rs 30.10 crore for 9M.

• Domestic turnover grew 15% and export turnover 22% YoY on a comparable-period basis; raw material consumption was Rs 112.73 crore versus Rs 143.04 crore in the prior 12M.

• EBITDA was Rs 50.20 crore, with EBITDA margin 19.11% versus 20.05%; PAT margin was 11.46% versus 12.90%.

• Adjusted EPS excluding extraordinary items was Rs 25.98; reported EPS after extraordinary items was Rs 24.50, versus Rs 35.21 for prior 12M.

Outlook and guidance

• Focus remains on expanding formulation business domestically and internationally, developing untapped markets and global partnerships, and strengthening manufacturing capabilities.

• Ophthalmology and specialty marketing tie-ups in regulated export markets were identified as growth opportunities; API and R&D investments are intended to support backward integration and more competitive formulations.

• New domestic products, chronic and lifestyle therapies, and the oncology division are expected to support portfolio growth; nationwide oncology distribution was planned within 8–12 months of launch.