Torrent Pharmaceuticals (500420) Q4 05/06 earnings summary

Executive summary

• FY06 marked expansion into Europe through the Heumann acquisition, commissioning of the Baddi facility, broader field force and R&D investment in international generics.

• Consolidated net sales rose 81% to Rs.936.74 crore; consolidated net profit was Rs.50.86 crore versus Rs.48.76 crore.

• Standalone net profit increased to Rs.65.83 crore, including an Rs.8.06 crore exceptional write-off; profit excluding the item was Rs.73.89 crore.

Financial highlights

• Standalone sales and operating income increased 39% to Rs.691.97 crore from Rs.497.59 crore; net sales were Rs.678.02 crore, up 44%.

• Standalone PBDIT was Rs.120.10 crore versus Rs.81.79 crore; PBT before exceptional items was Rs.90.98 crore versus Rs.60.87 crore.

• Standalone PAT was Rs.65.83 crore versus Rs.52.92 crore; EPS was Rs.7.78, or Rs.8.41 adjusted for the exceptional item, versus Rs.6.25.

• Consolidated gross sales were Rs.1,001.01 crore versus Rs.565.91 crore; consolidated net sales were Rs.936.74 crore versus Rs.516.33 crore.

• Consolidated net profit was Rs.50.86 crore versus Rs.48.76 crore; EPS was Rs.6.01, or Rs.6.64 adjusted for the exceptional item, versus Rs.5.76.

Outlook and guidance

• Heumann operations were expected to break even in FY07-08; production transfer to lower-cost facilities in India was underway.

• FY06-07 plans included ~Rs.42 crore for the Baddi cephalosporin facility and R&D expansion at Bhat.

• Planned FY06-07 submissions for the US market: 8 ANDAs and 3 DMFs, following 4 ANDAs and 3 DMFs filed during FY06.

• Growth priorities included domestic field-force expansion, launches in Brazil and Russia/CIS, expansion in regulated markets, collaborative research and selective NCE development.