Neuland Laboratories (524558) Q4 13/14 earnings summary

Executive summary

• FY14 PAT rose 95.51% to ₹26.67 crore and EBITDA increased 17.16% to ₹72.80 crore; revenue growth was marginal after business reorganization.

• Focus shifted to API manufacturing and custom manufacturing, with product-mix changes and process improvements supporting profitability.

• Global reach included sales in 85 countries, over 500 DMFs, and exports representing 75.88% of FY14 sales.

Financial highlights

• Net revenue from operations was ₹46,569.33 lakh versus ₹46,058.65 lakh in FY13; total income was ₹46,910.81 lakh versus ₹46,390.53 lakh.

• EBITDA reached ₹72.80 crore, up 17.16% YoY; PAT was ₹26.67 crore versus ₹13.64 crore, up 95.51%.

• PBT was ₹3,422.36 lakh versus ₹1,549.55 lakh; finance costs were ₹2,363.76 lakh versus ₹3,133.00 lakh.

• Operating cash flow was ₹4,425.95 lakh versus ₹2,615.86 lakh; fixed-asset and work-in-progress purchases were ₹1,853.50 lakh.

Outlook and guidance

• Management expected FY15 growth momentum to continue, supported by niche, high-margin products, portfolio expansion and custom manufacturing opportunities.

• Nine products were planned for scaling in FY15; a 22-molecule/API development portfolio targeted launches between 2013 and 2016.

• APIC collaboration sales were anticipated to begin by the end of Q1 FY15; the alliance was expected to support long-term revenue growth in Japan.

• Strategic priorities included cost optimization, capacity expansion, quality improvements and adding value through technology and IP rather than relying mainly on capital equipment.