Mirroring the market

Mirroring the market

Pharma Q3 results were a mixed lot, with the rupee appreciation acting as a speed breaker for majority of the companies. Suja Nair skims us through the report card

Sustained growth is very essential for any company in order to meet the increasing demands and challenges, but only the best can stand the test of time. This is the time to analyse who has gained from their expertise and management and have aptly gone up the graph line to create a niche for themselves and who have fallen short to reach their goal.

The highs

Nicholas Piramal India Limited (NPIL) with a growth record of above 30 percent Compound Annual Growth Rate (CAGR) since 1988 has faced the test with perseverance. The company had consolidated revenues of Rs 24.7 billion in 2006-07. NPIL’s consolidated revenues for the quarter ended on 31st December 2007, that increased by 12.8 percent to Rs 7.3 billion over third quarter of the Financial Year (FY) 2007. Operating profit grew by 24.9 percent to Rs 1.2 billion, while net profit for the quarter grew by 31.0 percent to Rs 727.6 million. Earnings per Share (EPS) for the quarter were up by 31.2 percent to Rs 3.5.

According to ORG-IMS MAT Nov-07, the domestic branded formulation sales grew 15.6 percent to Rs 3.4 billion as compared to market growth of 12.3 percent. The company’s Custom Manufacturing (CMG) sales grew seven percent to Rs 3.4 billion during Q3 FY2008. There has been an increase in the custom manufacturing revenues from the facilities in India above 200 percent to Rs 554 million during Q3 FY2008, compared to Rs 180 million in Q3 FY2007. In the pathlabs business (Wellspring), the revenues for the quarter increased by 88.5 percent to Rs 314.7 million during Q3 FY 2008. Without considering the new chemical entities (NCE) R&D spend and exceptional items, the EPS was Rs 4.7 for the quarter and Rs 12.8 for the nine months ended 31st December 2007.

Gujarat based Sun Pharma reported continuous strong performance in Q3 FY08. Highlights of Q3 consolidated financials are the increase in net sales by 49 percent to Rs 8,040 million from Rs 5,400 million in Q3 FY07. Apart from this Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA), margin improved to 44.1 percent from 32.1 percent over the third quarter last year, net profit at Rs 3,184 million, an increase of 60 percent over Q3 last year.

Net sales for April-December 07 were at Rs 20,994 million, a 32 percent increase from Rs 15,879 million in first nine months of FY07. International business grew 38 percent. EBITDA margin improved to 38.6 percent from 33.1 percent over the same period last year. The net profit increased to 36 percent compared to the corresponding period last year. Net margin was at 36.4 percent for the nine months to December, compared to 35.4 percent for first nine months of FY07. There also had been a consistent growth in domestic formulations as well; sales at Rs 11,147 million registered a growth of 28 percent over the corresponding nine months last year, contributing 51 percent of total sales.

Glenmark Pharmaceuticals recorded a growth of 53.56 percent, its consolidated revenues of Rs 6,850.77 million in Q3 FY08, against Rs 4,461.23 million for the third quarter of the previous year. Revenues from generics business were Rs 2,678.41 million, as against Rs 1,308.96 million for the same quarter of previous year, registering a growth of 104.62 percent. The specialty business (including out-licensing revenues) had revenues of Rs 4,172.36 million as against Rs 3,152.27 million or the quarter of the previous year, recording a growth of 32.36 percent. Consolidated profits for the third quarter of FY08 increased to Rs 2,800.19 million from Rs 1,889.82 million for the previous year, an increase of 48.17 percent. The management estimates profits of Rs 892.80 million from generics business and Rs 1,907.39 million (including out-licensing revenues) from speciality business for the quarter.

Glenmark USA, posted revenues of Rs 2,040.76 million for the third quarter of FY08 against revenues of Rs 835.29 million, registering an increase of 144.32 percent over the third quarter of the previous year. Glenmark’s formulation business in India increased to Rs 1,213.90 million in the third quarter of FY 08, recording a growth of 8.06 percent. The ORG-IMS MAT figures for Nov 2007 reported that the company registered a value growth of 19.7 percent, vis-à-vis that of the industry (13.7 percent). Revenues from sale of API to regulated and semi-regulated markets globally were Rs 313.54 million for Q3 FY 08, recording an increase of 45.33 percent and the revenues from the domestic API and co-marketing business amounted to Rs 233.96 million in Q3 FY 08, recording an increase of 34.23 percent.

Hikal, headquartered in Mumbai, posted net sales of Rs 85.8 crore as compared to Rs 55.6 crore; net profit of Rs 4.8 crore as compared to Rs 9 crore in the corresponding quarter of the previous year, witnessing a growth of 54-64 percent respectively. The board declared an interim dividend of 30 percent i.e. Rs 3 per share to its equity share holders. Consolidated nine months performance of the pharmaceutical business recorded net sales of Rs 107.8 crore as compared to Rs 62.2 crore in the previous year and the crop protection business was at Rs 112.2 crore as compared to Rs 105.3 crore in the previous year; taking the total turnover of the company to Rs 220 crore as compared to Rs 167.5 crore in the previous year. The net profit was at Rs 38.1 crore as compared to Rs 23.4 crore in the previous year.

Hyderabad based Rs 200 crore pharma company Neuland Laboratories announced a growth of 107.48 percent in its net profit and a 16.5 percent jump in its turnover for the third quarter of the financial year 2007-08. The company reported net sales of Rs 57.51 crore for the quarter ended 31st Dec, 2007, as against Rs 48.46 crore during the same period in the previous fiscal, a growth of 18.69 percent. Neuland’s net profit for the third quarter ended 31 Dec 2007 was Rs 3.5 crore as compared to Rs 1.69 crore in the corresponding quarter of the last financial year. The company reported a turnover of Rs 57.88 crore during the third quarter of this fiscal as against Rs 49.67 crore in the corresponding quarter last year. The company achieved earnings per share of Rs 6.5 for the quarter as against Rs 3.13 in the corresponding period of the last financial year, an increase of 107.66 percent.

Ahmedabad based Zydus Cadila registered a total income of Rs 579.6 crore up by 22.7 percent from Rs 472.4 crore in the corresponding period last year, on a consolidated basis. Profit before Interest, Depreciation and Taxes (PBIDT) was up by 26 percent year-on-year (y-o-y) to Rs 104 crore during the quarter and from Rs 82 crore in the same period last year. Net profit from operations (exclusive of exceptional items) stood at Rs 50.6 crore from Rs 46.7crore, up by 8.4 percent. The income growth was mainly driven by a growth of 47 percent in formulation exports. The company’s consumer business was up by 27 percent. During the quarter, the company’s subsidiaries in France and US registered a strong performance. Zydus France SAS, which currently markets over 100 generic presentations, registered a healthy 31 percent growth in its generics business. In US, the company posted sales of Rs 57 crore during the quarter, up by 47 percent y-o-y.

For the third quarter that ended on 31st December 2007, Ajanta Pharma saw its sales increase by 22 percent to Rs 71.86 crore (from Rs 59.06 crore) and net profit increased by 49 percent to Rs 3.94 crore (from Rs 2.65 crore). For the nine months ended on 31st December 2007, the company’s sales increased by 24 percent to Rs 203.17 crore (from Rs 164.02 crore) while net profit increased by 49 percent to Rs 9.04 crore (from Rs 6.09 crore).

For the second quarter that ended on 31st December 2007, Mumbai based Indoco Remedies’ turnover increased by 15.91 percent to Rs 94.93 crore (from Rs 81.90 crore) while net profit increased by 23 percent to Rs 11.85 crore (from Rs 9.63 crore).

The lows

Delhi based Panacea Biotech’s audit committee reported a net turnover of Rs 2,263.5 million during the Quarter End (QE) of December 31, 2007 as compared to Rs 1,971.2 million for the corresponding quarter of previous financial year. The net turnover for the nine months ended on December 31, 2007 and also increased by five percent at Rs 6,349.2 million against Rs 6,047.8 million during the corresponding period of previous financial year. During the quarter under review, the company registered 31.9 percent growth in EBITDA at Rs 589.8 million on the back of strong growth in the turnover and controlled operating costs. The Profit Before Tax (PBT) grew by 13.5 percent at Rs 436.8 million and the net profit also grew by 6.7 percent at Rs 289.3 million against corresponding quarter of previous financial year. The net profit during the quarter under review included exchange loss of around Rs 34 million on account of conversion of convertible bonds into equity.

Hyderabad based Suven Life Science’s revenues are at Rs 8,788 lakhs for the nine months ending December 2007 compared to Rs 8,585 lakhs for the corresponding previous period. Process Analytical Technology (PAT) stood at Rs 632 lakhs compared to Rs 841 lakhs for the corresponding previous period, a decline of 25 percent. The segmental revenue for the nine months from Drug Discovery Development Support Services (DDDSS) increased by 93 percent to Rs 1,341 lakhs from Rs 696 lakhs. However, there is reduction in CRAMS revenue for the nine months from Rs 7,797 lakhs to Rs 7,154 lakhs, by eight percent. For the third quarter ending September 2007, the revenues stood at Rs 2,898 lakhs as compared to the corresponding previous quarter of Rs 3225 lakhs. The PAT stood at Rs 201 lakhs compared to Rs 383 lakhs for the corresponding previous quarter. The main factor that influenced the deficit in revenues and profits is the rupee appreciation while comparing with the figures of the year erstwhile.

suja.nair@expressindia.com