Monday, July 2, 2012

PIRAMAL HEALTHCARE LTD = Annual report for FY 2012 = Summary


Annual report for FY 2012


Details (in Cr) for the 10 years of  :: FY2003 : FY2004 : FY2005 : FY2006 : FY2007 : FY2008 : FY2009 : FY2010 : FY2011 : FY2012
Total Income 1,402 : 1,413 : 1,342 : 1,623 :  2,472 : 2,879 : 3,288 : 3,777 : 2,009 : 2,352
EBITDA : 333 :304 : 203 : 238 : 384 : 548 : 589 : 833 : 379 : 471
Interest 61 24 19 17 31 46 84 184 89 215
Profit Before Tax :146 : 203 : 211 : 148 : 267 : 373 : 341 :  500 : 16,415 :  121
Profit after Tax : 116 : 200 : 164 : 124 : 228 : 334 : 316 : 482 : 12,736 :  115
Earnings per Share : 30.3 : 52.1 : 8.5* :  5.8 : 10.3 : 15.9 : 15.1 : 21.4 : 572.2** : 6.6

* Face value of shares changed to Rs.2 per share from Rs.10 per share post share split in ratio of 1:5
** Includes gain on account of sale of the healthcare solutions business and sale of subsidiary - Piramal Diagnostics Services Private Limited


Summary - consolidated:

Ø  Total Operating Income : Rs.2,352.3 Cr
Ø  R&D Expenses : Rs.233.1 Cr
Ø  EBITDA : Rs.471.3 Cr
Ø  Net Profit : Rs.115.3 Cr
Ø  Gross margins : From 65.5% to 60.6% in FY2012
Ø  EBITDA Margin : From 18.9% to 20.0% in FY2012


Particulars   ::  FY2012 ::  FY2011 Growth %
Net Sales     ::  2,083.8 :: 1,627.3 :: 28.1
Investment Income :: 219.4 :: 335.8 :: (34.7)
Other Operating Income :: 49.1 :: 45.8 :: 7.3
Total Operating Income :: 2,352.3 :: 2,008.8 : 17.1
EBITDA :: 471.3 :: 378.7 :: 24.4
Interest Expense :: 215.5 :: 88.8 :: 142.6
Depreciation :: 129.3 :: 95.9 :: 34.9
Exceptional Items :: 5.7 :: (16,220.5)  ::
Profit Before Tax :: 120.9 :: 16,414.6  :: -
Tax 5.6 :: 3,678.9 :: -
Profit After Minority Interest :: 115.3 :: 12,735.7 :: -
EPS (Face value Rs.2/-) :: 6.6 :: 572.2 :: -
EPS before exceptional items (net of tax) Rs.6.9 Rs. 15.2  -

DIVIDEND : Recommended Dividend at Rs.17.50 per equity share of Rs.2 (i.e. 875%).


Pharma Solutions:

Ø  New contract signed for commercial manufacturing of off-patent product on an exclusive basis for a large pharma company
Ø  Significant ramp-up in volumes from a key customer for an ongoing contract at Digwal site
Ø  Capacity utilisation of oral solid dosage improved significantly
Ø  Our facilities at Pithampur, Digwal and Toronto cleared USFDA audit successfully

Piramal Critical Care:

Ø  Settled patent litigation with Baxter on - generic version of Baxter’s SUPRANE® (desflurane)
Ø  Increased market share in US for sevoflurane
Ø  Received registrations for sevoflurane in 28 EU countries

OTC & Ophthalmology:

Ø  Rank moved from 9th to 7th in OTC market in India, market share increased from 1.3% to 1.5% in FY2012
Ø  Lacto Calamine and Saridon were elected as superbrands during FY12
Ø  Extended i-pill franchise across women’s intimate range of products

Innovative Discovery & Commercialisation:

Ø  Completed Phase I/II trial for P276 in combination with gemcitabine for pancreatic cancer in India
Ø  Completed Phase I trials of P1446, an oral Oncology molecule in India and Canada
Ø  Received European CE mark approval in April 2012 for innovative bio-orthopaedic product for cartilage repair BST-CarGel®

Financial Services Business:

Ø  Commenced lending to real estate companies; highly experienced team in place
Ø  Built high quality loan book of Rs.351 Cr as on 31st March 2012
Ø  INDIAREIT received a mandate from Trafalgar/F&C Reit to manage their India investment (Amount: US$ 36 million)

Net Sales Analysis (Consolidated):

PHL’s Pharma Solutions business grew by 32.7% to Rs.1,354.5 Cr against Rs.1,020.6 Cr for FY2011. Revenue from Critical Care grew by 6.4% to Rs.412.6 Cr as compared to Rs.387.7 Cr in FY2011. Sales from OTC & Ophthalmology segment was Rs.220.0 Cr as compared to Rs.195.8 Cr in FY2011 registering growth of 12.3% for the year. Income from Financial Services business was Rs.53.4 Cr for the year.


Piramal Healthcare’s performance:

The revenues from Pharma Solutions business grew by 32.7% to Rs.1,354.5 Cr in FY2012 as compared to Rs.1,020.6 Cr in FY2011. The revenues from Indian assets grew by 52.7% to Rs.800.8 Cr against Rs.524.5 Cr in FY2011. The sales from assets outside India increased to Rs.553.7 Cr, up by 11.6%.

Significant growth in API business:

Pharma Solutions sales from API division registered significant growth on the back of ramp up of sales in an existing contract with a key customer. A new contract was signed for commercial manufacturing of off-patent product on an exclusive basis for a large pharma company. During the year, DMFs were filed for five new APIs.

Scale-up of packaging business at Morpeth:

Over the last few years, we have built a robust clinical trial packaging business at our Morpeth, U.K. facility. During the year, we secured contract for packaging for Pfizer’s key formulation in the U.S. market. The site has now end to end supply chain service.


Revenue from Critical Care business was Rs.412.6 Cr as compared to Rs. 387.7 Cr in FY2011 registering growth of 6.4%.
The growth was lower due to pricing pressure on sevoflurane in some markets and delayed regulatory approvals.

Settlement of patent litigation with Baxter:

Under the settlement, PHL may launch desflurane in USA as of 1st January 2014, subject to US regulatory approval. However, PHL may manufacture generic desflurane from 24th April 2012 solely for sale outside United States in markets where it has obtained/will obtain regulatory registrations.

Increased market share in US for sevoflurane:

PHL’s market share for sevoflurane in US has increased from 20% in March 2011 to 25% in March 2012 in volume terms.

Expansion in European Union:

During the year, PHL has received registrations for sevoflurane in 28 countries in European Union. PHL is currently focusing on preparing to launch sevoflurane in top 6 markets in EU.


Sales from OTC & Ophthalmology business grew by 12.3% to Rs.220.0 Cr in FY2012 as compared to Rs.195.8 Cr in FY2011. PHL’s rank improved from 9th to 7th in OTC market in India in FY2012. The market share has also gone up from 1.3% to 1.5%. During the year, PHL has extended i-pill franchise across women’s intimate range of products.


During the year, the NCE R&D unit of Piramal Life Sciences Limited (PLSL) was demerged into PHL.
This is product focused biopharmaceutical unit specializing in discovery and development of novel small-molecule drugs.
The strategy is to discover and optimize compounds to meet important unmet medical needs in the target markets of cancer, metabolic disorder, inflammatory and infectious diseases. The operating spend on NCE R&D expense for FY2012 was Rs.138.1 Cr.

Update on Financial Services businesses:

Ø  During FY 12, the company acquired INDIAREIT Fund Advisors As on 31st March 2012, they had Rs.4,200 Cr of assets under management.
Ø  Commenced lending to real estate sector through a NBFC – PHL Finance Pvt. Ltd - to capitalise on the deep domain knowledge and understanding of the real estate sector of the Piramal Group. 

Update on Pharma businesses:

Revenue from this business grew by 33% to Rs.1,355 Cr - driven by strong rebound from Indian facilities where revenue grew by 53% to Rs.801 Cr.

In Critical Care business, the company continues to strengthen  infrastructure in 102 countries -selling anesthetic and other critical care products to hospitals. Revenue from Critical Care business grew by 6% to Rs. 413 Cr in last year. 

Its Opthalmology business is market leader in India. Sales from OTC and Opthalmology business grew by 12.3% to Rs.220 Cr in last year.

During the year, NCE R&D unit of Piramal Life Sciences was demerged into the Company. It now has a strong pipeline of 17 drugs with 11 drugs in clinical trials phase. Received approval from British Health authorities to market its cartilage repair gel - BST-CarGel® in April 2012. This will enable it to commercially launch BST-CarGel® in all countries in European Union. 

It also acquired worldwide rights to the molecular imaging development portfolio of Bayer Pharma AG in April 2012. 

Vodafone investment:

Acquired Rs.11% stake in Vodafone India Ltd for Rs.5,864 Cr. We believe this investment would generate an attractive return for our Company.

Acquisition of Decision Resources Group:

In May 2012, the Company has acquired Decision Resources Group (DRG), a US based company in healthcare information segment, for US$ 635 million (Rs.3,400 Cr). It is a fast growing healthcare information business with CAGR of 20% from 2006 to 2011.

DRG brings long standing relationships with 48 out of top-50 pharma companies with very high customer renewal rate.

COMMENTS :-PIRIMAL healthcare ltd – is progressing well on various fronts. Its Q1 FY 13 results, which are due now, will provide us more clear insights into its future working. This will be keenly watched. Its investment in Vodafone away from its core strength – is to be watched for its benefits to the company. 

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