Srinivasan H.R. - Vice Chairman and Managing Director, D.V. Ravi – Director, Ram Yeleswarapu - President and CEO and Subhasri Sriram- CFO and Executive Director addressed the call

Highlights of the call:

During the quarter on qoq basis sales grew 11% to Rs 453.92 crore. OPM improved 30 bps to 19.9%.

Net profit grew 12% to Rs 45.86 crore.

On yoy basis sales grew 28% and net profit was up 14%. OPM improved 50 bps. 

In FY 2018 sales grew 18% to Rs 1587.24 crore and PAT was up 12% to Rs 160.46 crore. OPM fell 60 bps to 19.3%. In dollar terms sales grew 22% and maintained the growth guidance of being in 20-22% growth range.

IND AS led to restatement of PAT of Rs 12 crore in FY 2017.

Growth was led by life sciences business. It is growing at a CAGR of 13% in last 4 quarters. In last 12 quarter it has grown at a CAGR of 8.3%.

Order book at the end of FY 18 stands at $ 118.39 million. Out of that $ 116.49 million is from liefsciences business.

Order book has grown 28%.

Lifesciences business should grow at 22-25% going forward.

The company got designated as preferred CRO partner for 2 leading biopharmaceutical companies.

The company has good base for a roboust growth.

Lifescience business will be the primary growth driver of the company.

In Life sciences the company was awarded multi year multi geography annuity contracts for PV services \ by global generic pharma companies.

It was also awarded 3 studies in key growth areas of biosimilars and stem cell therapies.

Digital R&D is shaping the world of clinical trials. Real world evidence will drive the design of clinical trials. Artificial intelligence and machine learning will play a large role in understanding and interpreting real-world data. The company is well placed to take advantage of this disruption.

The company supported 4 global pharma companies to comply with the US Drug Supply Chain Security Act and EU Falsified Medicines Directives.

Unbilled revenue is one which has not yet moved in debtors but the services have been given. This is not a big number and would be sub 2%.

In FY 2018 Consulting and Nets accounted for 12% of sales, Clinical (included generics) accounted for 29% and 59% came in from Regulatory and PV.

The company added 20-22 customers in FY 2018 and they were in small company category.

5 year growth plan has organic component growing at 22-25% CAGR.

Second line is inorganic part and the company is looking at M&A in clinical space in US. The company has not come across any company which gave it synergy and value addition. There are no strong prospect currently.

Margins will be stable at around the Q4 2018 levels.

Total capex stood at Rs 156.2 crore in FY 2018 against Rs 137.0 crore.

Going forward most of the capex will be in the clinical space.

80% of sales comes from US followed by APAC. Order book is growing well in APAC.