Marksans Pharma (MARKSANS) Q4 09/10 earnings summary

Executive summary

• FY10 standalone turnover was Rs. 19,956.21 lakh and net profit Rs. 28.98 lakh; consolidated turnover was Rs. 35,936.58 lakh with a net loss of Rs. 962.16 lakh.

• Standalone results improved sharply in Q4: turnover Rs. 5,560.18 lakh versus Rs. 3,050.34 lakh YoY, and net profit Rs. 507.49 lakh versus a net loss of Rs. 1,343.13 lakh.

Financial highlights

• Standalone turnover fell to Rs. 19,956.21 lakh from Rs. 20,356.11 lakh; net profit declined to Rs. 28.98 lakh from Rs. 49.49 lakh, mainly due to raw-material inflation and competition.

• Consolidated turnover was Rs. 35,936.58 lakh versus Rs. 36,013.10 lakh; PBT loss widened to Rs. 922.66 lakh from Rs. 699.92 lakh.

• Consolidated net loss after tax was Rs. 962.16 lakh versus Rs. 795.48 lakh, driven mainly by European acquisition-related payments, FX fluctuation and goodwill amortization.

• Standalone cost of sales rose 4.66% to Rs. 15,955 lakh; admin, selling and operating expenses declined 34.33% to Rs. 1,593.50 lakh.

Outlook and guidance

• Management expected satisfactory performance, with greater emphasis on formulations; domestic specialty divisions were expected to sustain growth and introduce niche molecules.

• More U.S. ANDA approvals were expected during FY11; product pipeline included complex formulations and molecules for U.S. and European markets.

• European focus remained on solid oral products; the report cited an expected generics-market CAGR of 8.5% for 2008–2020.

• Relonchem’s performance was expected to improve, with its FY10 loss characterized as exceptional and not expected to recur; Bell anticipated a similar activity level in the coming year.