Neuland Laboratories (524558) Q4 11/12 earnings summary

Executive summary

• FY12 consolidated revenue rose 13% to ₹4,543.2 million, while profit after tax fell to ₹25.6 million from ₹52.9 million amid cost and financing pressures.

• The strategy shifted toward high-value, complex-chemistry APIs, niche products, contract manufacturing and stronger operational controls.

• Order visibility improved in Q4; management reported a robust API order book and targeted sustainable growth from FY13.

Financial highlights

• Consolidated revenue was ₹4,543.2 million vs ₹4,018.8 million in FY11; consolidated operating profit was ₹490.0 million vs ₹501.6 million.

• Consolidated PAT was ₹25.61 million vs ₹52.89 million; consolidated basic EPS was ₹4.75 vs ₹9.76.

• Standalone net revenue was ₹4,482.34 million vs ₹3,967.95 million; standalone PAT was ₹20.32 million vs ₹50.69 million.

• Finance costs rose to ₹332.74 million from ₹298.37 million; raw materials consumed were ₹2,898.63 million, 64.42% of total income vs 63.39%.

Outlook and guidance

• API order book was described as robust, with healthy earnings visibility for several months; higher margins, lower costs, improved cycle time and lower debt were expected to support FY13 earnings.

• FY13 regional revenue mix targets: Europe 54%, North America 23%, India 17% and ROW 6%; Europe was expected to grow at a higher trajectory.

• Nine products were being readied for FY13 launch; 20 additional products were planned for launch over FY14–FY17, with customer engagement covering 93% of their estimated market.

• Process improvements across 24 existing products were planned for FY13; contract manufacturing was positioned as a strategic growth area.