Strides Pharma Science (STAR) Q4 08/09 earnings summary

Executive summary

• Reorganized global operations into Specialties, Pharmaceuticals and Branded Generics, with Specialty Pharmaceuticals positioned as the core growth engine.

• FY2009 operating EBITDA rose 63% to Rs.2,105 million and PAT before minority interest rose 16% to Rs.1,210 million.

• Continued-operations revenue grew 33%; the stated FY2010 ambition was 35–37% top-line growth and over 70% EBITDA growth.

Financial highlights

• Consolidated operating revenue increased 23% to Rs.13,283 million; continuing-operations revenue grew 33%.

• Consolidated total revenue was Rs.13,283 million versus Rs.13,312 million; FY2008 included Rs.2,509 million of non-operational income.

• Consolidated PBT increased 24% to Rs.1,429 million; PAT after minority interest was Rs.1,097 million versus Rs.1,080 million.

• Standalone revenue rose 18.5% to Rs.7,847 million; PAT was Rs.1,055 million versus Rs.61 million, with FCCB buyback gains contributing to PBT.

• Operational EBITDA margin expanded 400 bps to 16%; R&D expenditure was Rs.581 million versus Rs.583 million.

Outlook and guidance

• FY2010 top-line growth targeted at 35–37%, EBITDA growth above 70%, and EBITDA margin of 20–21%.

• Specialty Pharmaceuticals growth targeted above 50% with a 30% EBITDA margin; Pharmaceuticals growth of 10–11% and Branded Generics growth of 15–16% were projected.

• Priorities include sterile products, global partnerships, regulatory filings, higher-value R&D, capacity utilization and working-capital optimization.

• USFDA approval for the new Bangalore sterile plant was expected in May 2010; first Pfizer-licensed US injectables were expected to launch in 2010.