Strides Pharma Science (STAR) Q4 07/08 earnings summary

Executive summary

• FY08 consolidated revenue rose to Rs13,777.05m from Rs8,696.25m; PAT was Rs1,079.63m versus a Rs501.21m loss, with major disposal gains and accounting effects shaping reported results.

• Strategy centered on niche generics, sterile injectables, R&D and partnerships; operations were reorganized into India, International and Brands segments.

Financial highlights

• Consolidated sales and services Rs10,203.31m, up from Rs7,442.51m; total income Rs13,777.05m versus Rs8,696.25m.

• Consolidated operational EBITDA Rs1,857m versus negative Rs46m; reported EBITDA Rs4,270m versus Rs1,270m, including non-operational income of Rs2,413m in 2008.

• Consolidated PAT after minority interest and associate share Rs1,079.63m, compared with a Rs501.21m loss; basic EPS Rs26.91 versus negative Rs15.57.

• Standalone total income Rs6,621.33m, up ~53%; PAT Rs61.35m versus a Rs1,152.14m loss.

• No dividend recommended; the board cited inadequate profits for the year.

Outlook and guidance

• North American launches were expected in 2009; the portfolio included 75 US ANDA filings and 24 approvals, with additional approvals and launches expected to drive revenue and profit growth.

• Newly expanded sterile facilities were expected to contribute revenue in coming quarters and become fully operational in 2010; sterile capacity increased 500%.

• GSK product commercialization was expected to begin in 2010, with the licensed portfolio potentially expanding to 45 products over four years across 95 emerging-market countries.

• Grandix had prepared 15 products for rollout, with plans to expand its India medical-representative network to 600+.