Max Financial Services (MFSL) Q4 99/00 earnings summary

Executive summary

• FY 1999-2000 delivered reported pre-tax profit of Rs 42.20 crore and profit after tax of Rs 37.20 crore on gross revenue of Rs 141.71 crore; results cover nine months and are not comparable with the prior 14-month period.

• Strategy shifted toward healthcare, life insurance and IT while maintaining pharmaceuticals and specialty products; partnerships and investments advanced the new businesses.

• Independent PwC analysis valued specified businesses and investment interests at Rs 464-510 crore; including other financial investments, reported investment value was Rs 850-896 crore.

Financial highlights

• Sales and other income were Rs 141.71 crore, including Rs 60.56 crore from investment income; operating profit before interest, depreciation and tax was Rs 54.98 crore.

• PBT was Rs 42.20 crore and PAT Rs 37.20 crore; annualised EPS was Rs 43.02 on pre-bonus equity of Rs 11.53 crore.

• Investment income declined to Rs 60.56 crore from Rs 175.45 crore in the prior period, which included a special interim dividend of Rs 165 crore from MTVL.

• Existing Pharma and Specialty Products businesses reported higher sales and profitability; investment income remained a material contributor to total results.

Outlook and guidance

• Planned healthcare investment of about Rs 400 crore over five years, with Dr Max clinics and Max Medicentres targeted to open before end-2000; two multispecialty hospitals were planned thereafter.

• Life insurance venture planned about Rs 300 crore of investment over five years and targeted gross written premiums of US$1 billion by 2010; first policy launch targeted within 2-3 months of receiving a license.

• Rs 37.04 crore investment in HealthScribe India was planned over 30 months; Pharma's business plan targeted Rs 150 crore turnover.

• Comsat Max planned migration to INSAT 3B, additional GlobalWay points of presence, and expansion into B2B and data warehousing.