Zydus Wellness (531335) Q4 06/07 earnings summary

Executive summary

• Sales and other income rose 49% to Rs 438,071 thousand; profit after tax declined 3.65% to Rs 23,897 thousand as advertising spend increased to build brand awareness.

• A depreciation-method change added Rs 1,518 thousand to current-year profit, while an Rs 18,820 thousand write-back of prior-year depreciation lifted profit available for appropriation.

Financial highlights

• Revenue was Rs 438,071 thousand versus Rs 293,976 thousand; profit before tax was Rs 47,295 thousand versus Rs 47,657 thousand.

• Profit after tax was Rs 23,896 thousand versus Rs 24,803 thousand; profit for the year after the depreciation write-back was Rs 42,716 thousand.

• Proposed dividend was 10% (Rs 1 per share), totaling Rs 6,522 thousand including dividend tax; Rs 4,500 thousand was transferred to general reserve.

• Basic and diluted EPS was Rs 4.29 before extraordinary items and Rs 7.66 after extraordinary items, versus Rs 4.45 in both measures in FY06.

Outlook and guidance

• Production capacity expansion was planned to meet increased product demand; management expected initiatives under new ownership to support business growth and improved profitability.

• Results of substantial brand-building advertising expenditure were expected to become visible in FY08.