Neuland Laboratories (524558) Q4 06/07 earnings summary

Executive summary

• FY07 revenue rose 25.2% to Rs.2,132.5 million; net income increased 44.9% to Rs.90.38 million and EPS reached Rs.16.75.

• Growth reflected higher API volumes, domestic demand, contract research income, market-share gains in existing products and launches in less competitive niches.

Financial highlights

• Revenue was Rs.2,132.5 million vs Rs.1,702.89 million; PBT rose to Rs.99.84 million from Rs.86.92 million, and PAT to Rs.90.38 million from Rs.62.36 million.

• Profit before depreciation and tax was Rs.153.00 million vs Rs.147.18 million; depreciation was Rs.53.16 million vs Rs.60.26 million.

• EPS increased to Rs.16.75 from Rs.11.43; proposed dividend was Rs.2.50 per share, or 25%.

• Exports rose 10.1% to Rs.1,322.65 million; domestic revenue grew 61.2% YoY.

Outlook and guidance

• Targeting 10–15 new product launches annually, with another operations overview setting a goal of at least 10 per year for the next three years.

• Improved customer reach, product offerings, research-led projects, volumes and value propositions are expected to support income streams in FY08 and beyond.

• Management expects margins to improve as niche products and higher-margin services mature, with most benefits anticipated over the next 3–5 years.

• Plans include expanding drug discovery and development support, clinical-trial capabilities and an end-to-end service offering for pharmaceutical clients.