Jubilant Organosys FY 2007 PAT up 76%, Net Sales up 21%

Jubilant Organosys Limited, an integrated pharmaceutical industry player and the largest Custom Research and Manufacturing Services Company in India, today announced its audited financial results for Q4 and FY2007.

Commenting on the Company’s performance, Mr. Shyam S Bhartia, Chairman & Managing Director, Jubilant Organosys Ltd, said:

"It has been a record year for Jubilant both in terms of revenues and earnings. Encouragingly, the future looks even better as we are hopeful of maintaining the momentum next year. Our focus on the PLSP business continues to deliver strong results which validates not just our strategy but also our ability to create a global niche for ourselves. We have created multiple global relationships through our CRAMS business and it will be our intention to be an outsourcing partner of choice for leading pharma and life science companies. As you all must be aware we have also implemented both organic and inorganic initiatives in the recent past which have further strengthened our abilities and capacities to enable a larger footprint in the global outsourcing place.

While our industrial chemicals and other businesses continue to do well in terms of cash flows, the PLSP operation will be the lead driver of our performance going forward."

FY2007 (April 2006 - March 2007) compared with FY2006 (April 2005 - March 2006)

Net Revenues

FY2007 Net Revenues increased 20.7% to Rs. 18097 million as compared to Rs. 14990 million in FY2006. This comprised a 41.3% higher revenue in international sales to Rs. 8318 million. Leading revenue performers were the Company’s PLSP business that includes the CRAMS operation which witnessed significant improvement over the last year.

Operating Profit
FY2007 EBIDTA was Rs. 3771 million, increasing 59.3% from Rs. 2367 million last year. After excluding interest earnings on the unutilized portion of the FCCB proceeds the operating profits stood at Rs. 3346 million.

EBIDTA growth was augmented by better margins in the CRAMS and Medicinal Chemistry Services Business. PBIT in PLSP business increased by 42.5% to Rs. 1797 million.

The Industrial Chemical business benefited from a favourable raw material pricing environment and its PBIT increased by 38.4% to Rs. 911 million. The Performance Polymers business also continued to do well reporting a PBIT growth of 28.4% to Rs. 122 million.

On stand alone basis the Company recorded an EBIDTA of Rs.3663 million compared to Rs. 2380 million up by 53.9%.

Net Profit and EPS
Profit after tax at Rs. 2280 million increased by 76% from Rs.1297 million resulting in an EPS (diluted) of Rs.13.02 for FY07 compared to Rs. 8.57 for FY06. On standalone basis, the profit after tax was Rs.2315 million as compared to Rs.1388 million recording a growth of 66.8%. The EPS (diluted) for FY07 was Rs.13.22 as compared to Rs9.17 in FY06.

Board recommends 125% dividend
The Board of Directors of the company recommended the dividend of 125 % on fully paid up equity shares of Re. 1 each, for the year ended 31 March 2007.

This will result in a dividend payout of Rs. 209.78 million (including dividend tax).

Q4 FY2007 (January - March 2007) compared with Q4 FY2006 (January - March 2006)

Net sales
Jubilants’s fourth quarter net revenues improved by 9.6% to Rs. 4633 million. The Company’s international operations which are included in the PLSP business delivered results in-line with internal targets. The Company’s performance in the Industrial Product and Performance Polymers was seen supporting overall revenue growth.

At a stand-alone level, the Company’s net sales grew by 16.3% to Rs. 4296 million from Rs. 3693 million in Q4 FY2006 driven by PLSP operations where sales stood at Rs. 2007 million up 22%. Revenues from Industrial Chemicals and Performance Polymers business were also better during the quarter.

Operating Profit
Jubilant’s EBIDTA for the quarter was up 22.9% to Rs. 970 million from Rs. 789 million. On stand-alone basis, the Company recorded an EBIDTA of Rs. 971 million compared with Rs. 770 million in Q4 FY2006.

The growth in operating profit was primarily driven by the CRAMS business, while the International operations are gaining greater earnings stability.

Net Profit and EPS
Fourth quarter net profits were at Rs. 638 million growing 32.5%, resulting in an EPS of Rs. 3.59 on a diluted basis (on Re. 1 paid up equity share) compared to Rs. 3.17 in the corresponding quarter last year.

On standalone basis, the profit after tax was Rs.696 million as compared to Rs. 474 million resulting in a growth of 46.8%. The EPS (diluted) for Re 1 share on standalone basis was Rs. 3.91 for Q4 FY2007 as compared to 3.12 % for Q4 FY2006.

Outlook for FY2008
The Company expects FY2008 to be another record year in terms of revenue and earnings. The strong outlook is driven by the anticipated growth in the Company’s PLSP business which will be driven by better CRAMS performance and success in Drug Discovery initiatives, as global pharma companies seek to develop and commercialize new drugs faster and more efficiently. Inorganic initiatives implemented in the past should also start contributing to performance more positively. Jubilant will continue to focus on regulated markets and foresees encouraging growth in North America, Europe and Japan.

The Hollister acquisition announced last week is expected to strengthen Jubilant’s portfolio of businesses in the US and will make positive earnings contribution from day one further augmenting performance.

The Company has been implementing organic expansion plans which should gain operational maturity in the next year, adding to the performance outlook.

The Company’s Industrial Products business continues to sustain its contribution to cash flows and should do even better given a distinctly soft bias on key raw material prices.

The Performance Polymers business is stable and should post better results given the successful restructuring of its product portfolio and intense efforts to gain market share.

Jubilant also has a healthy balance sheet position and robust cash flows from operations. This enables the Company to effortlessly implement its growth plans and focus more on enhancing returns from its investments.

Therefore, the overall outlook for the whole FY2008 is optimistic while there could be quarter to quarter variations given the nature of the Company’s business.

Source : Equity Bulls

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