Jubilant Life Sciences Q2 revenues up 22%
Shrikant / 02 Nov 2011
Jubilant Life Sciences, one of the largest life sciences and pharma companies, reported strong financial results yesterday. The company posted a 22% rise in its total revenues, from 860 crore in Q2 FY11 to Rs 1050 crore in Q2 FY12. Despite the strong topline growth, the company posted just over 8% growth in its bottomline. Its Profits After Tax (PAT) accounted unrealised foreign exchange losses of Rs 43 crore for the second quarter, which impacted the bottomline growth.
Good topline growth was mainly due to volume growth in all business segments, increased prices and robust sales in regulated markets (USA, Canada, Europe and Japan). The contribution of revenues from total sales in regulated markets rose from 54% to 58% in Q2 FY12. The total income from international operations remained at Rs 730 crore, while that from its Indian operations remained at Rs 318 crore, showing 22% growth over the corresponding period last year.
Jubilant's Generics segment outperformed, with 119% YOY growth in revenues, while the Life Science Ingredients segment reported 6% growth over the second quarter of the last fiscal. The growth in generics has happened mainly due to a growth in its Radio-Pharma business. The Contract Manufacturing (CMO) and Drug Discovery and Development (DDDS) segments have shown YoY growth of 11% and 14% respectively in this quarter. The growth in Life Sciences Products resulted due to volumes and positive price variance of 26%, while that in Life Sciences Services resulted from an improved product mix and higher cost rationalisation.
Good topline growth was mainly due to volume growth in all business segments, increased prices and robust sales in regulated markets (USA, Canada, Europe and Japan). The contribution of revenues from total sales in regulated markets rose from 54% to 58% in Q2 FY12. The total income from international operations remained at Rs 730 crore, while that from its Indian operations remained at Rs 318 crore, showing 22% growth over the corresponding period last year.
Jubilant's Generics segment outperformed, with 119% YOY growth in revenues, while the Life Science Ingredients segment reported 6% growth over the second quarter of the last fiscal. The growth in generics has happened mainly due to a growth in its Radio-Pharma business. The Contract Manufacturing (CMO) and Drug Discovery and Development (DDDS) segments have shown YoY growth of 11% and 14% respectively in this quarter. The growth in Life Sciences Products resulted due to volumes and positive price variance of 26%, while that in Life Sciences Services resulted from an improved product mix and higher cost rationalisation.
| Business Segment | Life Science Products | Life Science Services | |||
| Life Science Ingredients | Generics | CMO | DDDS | Others | |
| Revenues | 592 | 241 | 154 | 58 | 3 |
| YoY Growth % | 6% | 118% | 11% | 13% | 4% |
Jubilant’s manufacturing expenses decreased by 2% on account of higher volumes and better economics of scale. In the June 2011 quarter, the company purchased large volumes of alcohol, which has protected them from increased alcohol prices. This has resulted in decreased material costs in this quarter. Its manufacturing and staff costs remained the same, indicating resource optimisation. As a result of this, its EBITDA margins have improved from 17.8% in Q2 FY11 to 23% in Q2 FY12. Its Life Sciences Services business has shown sharp increase in EBITDA margins from 2.8% to 16.7%, mainly on account of higher capacity utilisation.
Interest expenses increased from Rs 25 crore in Q2 FY11 to Rs 50 crore in Q2 FY12.Its average cost of borrowing remained at 6.1% in the first half of this fiscal, which is higher by 10 basis points as compared to that in the second quarter of last year. Jubilant suffered losses of 43 crore in foreign currency transactions due to the rupee depreciation. Its Net Profits were at Rs 79 crore, compared to Rs 73 crore in the same period last year.
Interest expenses increased from Rs 25 crore in Q2 FY11 to Rs 50 crore in Q2 FY12.Its average cost of borrowing remained at 6.1% in the first half of this fiscal, which is higher by 10 basis points as compared to that in the second quarter of last year. Jubilant suffered losses of 43 crore in foreign currency transactions due to the rupee depreciation. Its Net Profits were at Rs 79 crore, compared to Rs 73 crore in the same period last year.
The Road Ahead
During the quarter, the company filled 2 DMFs (Drug Manufacture Files), with its total portfolio now at 54. Beside, there were also 4 ANDA (Abbreviated New Drug Application) filings. It has received ANDA approval for Pantoprazole Sodium Delayed Release Tablets in 20 mg and 40 mg formulations.
The company's subsidiary, Jubilant HollisterStier, has entered into a contract with an undisclosed US pharma company to manufacture an OTC (Over The Counter) product in the women's health and personal care segment at its Montreal facility in North America. This contract has a total value of over US $ 70 million for a period of over 4 years, which could be extended for another 2 years for a higher quantity. The production of this has already started at manufacturing facility in Montreal.
Jubilant has also signed a long-term supply agreement worth US $ 80-100 million in the Life Science Ingredients business with an international life sciences company. This contract is valid for 3 years from FY13. It has also tied up with a leading European pharma company to provide pre-clinical candidates to develop products in the gastro-intestinal therapeutic segment.
In this quarter, the company has commissioned a 10000 TPA manufacturing facility in the Gujarat SEZ to manufacture nutrition products, Niacinamide and 3-Cyanopyridine. Supplies from this plant have already started, and are mainly aimed towards international markets. It has also ramped up its Pyridine capacity to meet the growing demand. In the generics business, the company has launched new products in new geographical regions. It also expects growth in its clinical trial business from FY13 onwards.
In the first quarter of this fiscal, Jubilant had posted 16% growth in revenues and 53% growth in Net Profits. Going forward, we believe that the positive momentum will continue on the back of volume growth and capacity additions of Pyridine and nutritional products.
The company's subsidiary, Jubilant HollisterStier, has entered into a contract with an undisclosed US pharma company to manufacture an OTC (Over The Counter) product in the women's health and personal care segment at its Montreal facility in North America. This contract has a total value of over US $ 70 million for a period of over 4 years, which could be extended for another 2 years for a higher quantity. The production of this has already started at manufacturing facility in Montreal.
Jubilant has also signed a long-term supply agreement worth US $ 80-100 million in the Life Science Ingredients business with an international life sciences company. This contract is valid for 3 years from FY13. It has also tied up with a leading European pharma company to provide pre-clinical candidates to develop products in the gastro-intestinal therapeutic segment.
In this quarter, the company has commissioned a 10000 TPA manufacturing facility in the Gujarat SEZ to manufacture nutrition products, Niacinamide and 3-Cyanopyridine. Supplies from this plant have already started, and are mainly aimed towards international markets. It has also ramped up its Pyridine capacity to meet the growing demand. In the generics business, the company has launched new products in new geographical regions. It also expects growth in its clinical trial business from FY13 onwards.
In the first quarter of this fiscal, Jubilant had posted 16% growth in revenues and 53% growth in Net Profits. Going forward, we believe that the positive momentum will continue on the back of volume growth and capacity additions of Pyridine and nutritional products.
| Particulars | Q2FY11 | Q2FY12 |
| Net Sales | 859 | 1,048 |
| Other operating income | 1 | 2 |
| Total income | 860 | 1050 |
| Total Expenditure | 712 | 812 |
| Operating Profit | 148 | 238 |
| Other Income | 4 | 3 |
| EBITDA | 152 | 241 |
| Depreciation | 49 | 51 |
| Interest (Net) | 25 | 50 |
| Except. Item | 3 | 43 |
| Tax Expenses | 3 | 9 |
| Minority Int. | -1 | 9 |
| Net Profit | 73 | 79 |
| EPS- Basic | 4.61 | 4.98 |
| EPS- Diluted | 4.17 | 4.98 |
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