Torrent Pharmaceuticals (500420) Q4 04/05 earnings summary

Executive summary

• FY 2004-05 sales and operating income reached Rs 497.59 crore; net profit fell to Rs 52.92 crore from Rs 64.17 crore as operating costs and investment in R&D and expansion rose.

• International growth strengthened, with consolidated net sales up 16% to Rs 516.33 crore; domestic branded sales grew only 2% amid VAT-related destocking, withdrawals and price pressure.

Financial highlights

• Sales and operating income were Rs 497.59 crore versus Rs 443.08 crore; net profit was Rs 52.92 crore versus Rs 64.17 crore, down 17.5% YoY.

• EPS was Rs 25.02 versus Rs 30.33; PBT before exceptional items was Rs 60.87 crore versus Rs 90.97 crore.

• Consolidated net sales were Rs 516.33 crore versus Rs 445.00 crore; consolidated net profit was Rs 48.76 crore versus Rs 54.47 crore.

• Other operating income rose to Rs 25.58 crore from Rs 13.19 crore, including Rs 13.89 crore Novartis license income.

Outlook and guidance

• FY 2005-06 domestic sales expected to benefit from recovery of VAT-related deferred sales; price cuts and the Valz withdrawal were estimated to reduce sales by Rs 21 crore, based on FY 2004-05 sales.

• Baddi formulation plant was scheduled for completion in September 2005; production expected to benefit from excise and income-tax exemptions.

• FY 2005-06 plans included filing six US ANDAs, developing 26 domestic formulations and 36 APIs/formulations for export markets.