Strides Pharma Science (STAR) Q4 04/05 earnings summary

Executive summary

• FY2005 revenue was Rs. 3,337.84 million and net profit Rs. 461.09 million; stated annualized revenue growth was 36% versus the prior 15-month period.

• Regulated markets contributed 33% of sales, up from 27%; 52 product deals were signed with pharmaceutical partners worldwide.

• Consolidated revenue was Rs. 5,237.18 million and profit after minority interest and associate share was Rs. 485.64 million.

Financial highlights

• Standalone sales and services were Rs. 3,310.72 million; total income was Rs. 3,337.84 million, versus Rs. 3,053.12 million and Rs. 3,061.63 million, respectively, in the prior 15-month period.

• Standalone operating profit was Rs. 785.64 million and profit before tax Rs. 486.85 million; profit after tax rose to Rs. 461.09 million from Rs. 291.59 million.

• Development income increased to Rs. 442.21 million from Rs. 119.90 million; net profit on investment disposal contributed Rs. 27.12 million to other income.

• Consolidated sales and services were Rs. 5,237.18 million; consolidated profit before tax was Rs. 592.27 million and profit after tax before minority and associate share was Rs. 558.02 million.

• Standalone operating cash flow was Rs. 634.03 million; cash and cash equivalents closed at Rs. 701.82 million, including unused FCCB proceeds.

Outlook and guidance

• Priorities include growing product portfolios, developing new delivery systems, pursuing niche opportunities, reducing costs and improving operational efficiency.

• Strategy centers on regulated-market exports, niche manufacturing, partnerships and contract development, supply and manufacturing; quicker registrations are viewed as key to returns.

• Management expected continued aggressive growth, with opportunities in generic products and domain leadership strategies.