Strides Pharma Science (STAR) Q4 98/99 earnings summary

Executive summary

• FY98-99 marked completion of the merger with Plama Laboratories and Remed Laboratories, broadening the business across pharmaceuticals, sterile injectables and speciality chemicals. The merged entity reported income above Rs 1bn.

• Revenue growth and improved product mix lifted operating profit; commissioning of the soft gelatin facility advanced the strategy in nutraceuticals and generics.

Financial highlights

• FY98-99 income was Rs 1,075.5m, including sales of Rs 1,070.0m, versus total income of Rs 659.2m in FY97-98; reported income growth was 62%.

• Operating profit (PBIDT) was Rs 238.6m, versus Rs 114.0m; PBT was Rs 95.8m, up 49% YoY, and PAT was Rs 91.3m versus Rs 62.5m.

• Cash profit was Rs 140.3m; retained earnings were Rs 76.4m and net worth was Rs 941.2m at March 31, 1999.

Outlook and guidance

• Soft gelatin capacity was expected to be fully occupied toward the end of FY99-00, supporting revenue and profit; tablet and hard-gelatin blocks were nearing completion and expected to become operational later in the year.

• Priorities included product launches at shorter intervals, entry into additional regulated markets and growth in generics, nutraceuticals and speciality chemicals.

• Directors identified comfortable liquidity as a primary objective for FY99-00, alongside maintaining positive gearing and a judicious mix of owned and borrowed funds.