Thursday, October 25, 2007

Shilpa Medicare Q2FY08 Net Profit INR 28.80 Million, Up 57% YoY

-- Q2 net sales INR 218.87 mln, Up 25% YoY.
-- Q2 per-share earning INR 8.30 vs INR 5.27 year ago.
-- Profitability rise on the back of rising share of global oncology sales in revenue mix.
-- “Vindication of strategic focus on high growth, high margin oncology segment”: Shilpa Managing Director Vishnukant Bhutada.
-- “Dollar depreciation not a significant worry owing to value-added presence”: Vishnukant Bhutada

BSE : 530549
Reuters: SHME.BO
Bloomberg: SLPA@IN

Shilpa Medicare Ltd, one of India's leading specialty pharmaceutical manufacturers with primary focus on custom synthesis and oncology APIs, has announced that net profit for the quarter-year ended 30 September 2007 was INR 28.80 million, up 57% from INR 18.29 million in the corresponding quarter a year ago. Q2 net sales from operations were at INR 218.87 million, up 25% from INR 175.61 million a year ago. Q2 non-annualized earnings per share were INR 8.30 against INR 5.27 a year ago

Net profit for the first half of the fiscal ended 30 September 2007 was INR 54.32 million, up 49% from INR 36.47 million a year ago.

Other Q2FY08 financials

Other income was INR 9.18 million, up 144% YoY, owing, in a large part, to an excise tax refund along with interest.

Interest expense was INR 1.20 million, up 133% YoY, largely on account of the investment in Shilpa Medicare’s upcoming 100% manufacturing EOU for oncology APIs.

Depreciation was INR 7.25 million, up 57% YoY, largely on the 3.86 MW wind power generation unit at Chitra Durga in Karnataka.

Material costs, as a margin of net sales, fell by nearly 8% to 67% from 75% a year ago owing to the increasing share of higher-margin oncology sales in Shilpa Medicare’s revenue mix.

Comment by Vishnukant Bhutada, Managing Director, Shilpa Medicare

Vishnukant Bhutada, Managing Director, Shilpa Medicare, said that the results are a firm vindication of Shilpa’s strategic focus on the high growth, high margin global oncology market.

“Our strategy of focusing hard and investing in the global oncology market is panning out on expected lines,” said Mr Bhutada. “Shilpa Medicare’s certified skills and manufacturing capabilities have proved to be significant differentiator among discerning buyers in the highly regulated markets of US and Europe.”

The recent depreciation is the US dollar, while not being positive for Shilpa Medicare, is not a major worry either, said Mr Bhutada. “At a global level, Shilpa differentiates itself on scale, value addition, and capability: the rupee-dollar exchange value is no doubt a factor, but it not the most important determinant of our company’s sales and margins.”

About Shilpa Medicare

Headquartered in Raichur, Karnataka state, Shilpa Medicare Ltd (www.vbshilpa.com) is among India's leading and fastest-growing manufacturers in pharmaceutical custom synthesis and APIs related to the oncology and non-oncology segments. In addition to the two current WHO GMP certified plants that have been audited and approved by global pharmaceutical majors, the company is setting up a third EOU exclusively for oncology APIs and customs synthesis at a cost of INR 700-750 million.

Shilpa Medicare was incorporated in 1987 by first generation entrepreneur Vishnukant Bhutada and his associates. Shilpa Medicare's FY2006-07 revenue was INR 674.1 million, of which exports constituted 76%, on INR 34.7 million equity share capital.

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