Marksans Pharma (MARKSANS) Q4 12/13 earnings summary

Executive summary

• FY2012-13 standalone revenue rose to ₹19,229.70 lakh from ₹15,459.13 lakh; net profit was ₹3,958.28 lakh versus a ₹18,106.61 lakh loss in FY2011-12.

• Consolidated revenue increased to ₹43,842.24 lakh from ₹35,554.87 lakh; consolidated profit after minority interest was ₹4,588.43 lakh versus a ₹17,883.97 lakh loss.

• FCCB settlements and improved results restored positive net worth, enabling de-registration from BIFR.

Financial highlights

• Standalone turnover grew 24.39% YoY; cost of sales increased 17.03% to ₹10,270.37 lakh.

• Standalone profit before depreciation, non-recurring expenses and tax was ₹3,830.84 lakh, versus a ₹2,328.91 lakh loss in FY2011-12.

• Standalone other expenses fell 82.5% to ₹2,993.19 lakh, reflecting one-time exceptional charges in FY2011-12; depreciation and amortization declined 51.60% to ₹870.33 lakh.

• Standalone finance costs decreased 79.36% to ₹1,013.24 lakh; FY2011-12 included FCCB foreign-exchange loss provisions.

• Consolidated revenue from operations was ₹43,842.24 lakh; consolidated profit before tax was ₹4,354.73 lakh and profit after tax before minority interest was ₹4,882.62 lakh.

Outlook and guidance

• New products launched in FY12 and FY13 generated ₹274 million in FY13; management expects these products to support future growth.

• India sales growth is expected to be driven by CRAMS demand and generic exports; new US ANDA approvals and launches are expected to support sales and EBITDA margins.

• UK OTC sales are expected to outgrow the domestic market, with distribution expansion and lower-cost raw-material sourcing intended to improve gross margins.

• UK generic operations expect cost synergies from integration of logistics, finance and accounts; Australia sales are expected to outgrow the OTC market.

• Management expects satisfactory performance, citing low-cost manufacturing, regulated-market approvals, international distribution and R&D capabilities.