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Net profit of J B Chemicals & Pharmaceuticals spurted by 58% to Rs 20.69 crore on moderate growth of 18% in total income from operations to Rs 163.21 crore. At operating level, the margins declined by 80 bps to 21.2%. Thanks to lower forex loss during the quarter Rs 3.51 crore as against Rs 6.67 crore, which boosted the growth in net profit. The higher growth in the sales is on the back of good growth in domestic formulations business and exports to Russia/ CIS countries.
The company is planning to increase its presence in rural and urban markets. For this purpose, it is planning to add 650 people in the current fiscal. It is also planning to set up a factory in SEZ at Panoli. If the company gets necessary approvals as per schedule, the factory will be operational by March 2011. Apart from these, JBCPL also plans to modernize its formulation facilities at Kadiya and Panoli and new products registration in few markets. The company launched Definity, an ultrasound contrast imaging product in domestic market during the July 2010. The launch was under an exclusive marketing arrangement with Lantheus medical imaging Inc USA.
Quarterly Performance
Net sales for the quarter ended June 2010 increased by 18% to Rs 158.87 crore on the back of good growth in domestic formulations business and exports to Russia/ CIS countries. Other operating income from operations rose by 22% to Rs 4.34 crore totals income from operation to increase by 18% to Rs 163.21 crore. Operating profit margins contracted by 80 bps to 21.2% due to rise in the other expenditure, sales promotions & publicity and employee cost overheads as percentage to sales, net of stock adjustments. Employee cost rose by 70 bps to 15.6%, sales promotions & publicity expense up by 50 bps to 7.1% and other expenditure increased by 220 bps to 21.1%. Thanks to decline in the consumption cost by 450 bps to 55.23 crore else margins would have further plunged.
Other income increased from Rs 0.04 crore in Q1 FY'10 to Rs 0.93 crore in Q1 FY'11. Thus, PBIDTA increased by 16% to Rs 35.50 crore. The company improved its supply chain and working capital management, which led lower interest cost by 20% to Rs 1.84 crore. The marginal growth in depreciation by 5% to Rs 5.48 crore further boosted growth in PBT before forex to increase by 23% to Rs 28.18 crore. The lower forex loss during the quarter at Rs 3.51 crore as against Rs 6.67 crore in the corresponding previous period lifted PBT to increase by 51% to Rs 24.68 crore. The effective tax rate declined by 340 bps to 16.2% paved net profit to increase by 58% to Rs 20.69 crore.
Yearly Performance
Total income from operations for the year ended March 10 declined by 7% to Rs 685.39 crore. As operating profit margins contracted by 320 bps to 22.2%, operating profit was declined 19% to Rs 151.83 crore. Increase in other income by 84% to Rs 1.94 crore and fall in the interest cost by 28% to Rs 8.95 crore restricted degrowth in PBDT to 18% at Rs 144.82 crore. However, increase in the deprecation by 4% to Rs 21.22 crore resulted PBT before forex gain/ loss decline by 21% to Rs 123.60 crore. Forex loss were reduced sharply to Rs 2.65 crore as against to Rs 63.82 crore in the corresponding previous period. As a result, PBT increase by 32% to Rs 120.94 crore. After accounting taxation and Prior period adjustments, the net profit was restricted grow by 28% to Rs 101.00 crore.
The promoter shareholding declined from 55.56% as on 31 March 2010 to 55.54% as on 30 June 2010.
Valuation
The scrip is hovering at Rs 98. The TTM EPS is Rs 12.9 and trading at 7.6 times.
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