Lupin (500257) Q4 05/06 earnings summary

Executive summary

• FY2005-06 net sales rose 38% to Rs.16,061.0 million; net profit increased 117% to Rs.1,827.2 million, supported by higher sales volumes in US and domestic formulations.

• Exports grew 40% and represented 46% of gross sales; domestic revenue grew 34%.

• Growth came from new US generic launches, stronger Suprax sales, domestic formulation expansion, and API growth; the stated target remained US$1 billion sales by 2009.

Financial highlights

• Gross sales reached Rs.16,610.4 million, up 37% YoY; net sales were Rs.16,061.0 million versus Rs.11,611.3 million.

• Net profit was Rs.1,827.2 million, up 117%; profit before tax was Rs.2,302.0 million versus Rs.852.7 million.

• EBITDA rose 106% to Rs.3,008.5 million from Rs.1,457.9 million; EBITDA was 19% of net sales.

• EPS increased to Rs.44.59 from Rs.20.50; the Board recommended a Rs.6.50/share dividend and 1:1 bonus issue.

• Consolidated net sales were Rs.16,954.0 million and net profit after minority interest was Rs.1,729.9 million; consolidated basic EPS was Rs.42.24.

Outlook and guidance

• Targeted at least 30% YoY organic growth and remained on track for US$1 billion sales by 2009.

• FY2006-07 R&D budget was Rs.1,458 million, a planned 35% increase in absolute terms from FY2005-06.

• US, EU and other regulated-market launches, branded paediatric products, new geographies and strategic alliances were expected to drive future growth.

• Management planned to fund growth primarily from earnings; acquisitions were contemplated where they offered synergies or accelerated expansion.