Business Information:

• During the quarter, it received approval from US FDA for its Abbreviated New Drug Application (ANDA) for 25 mg and 50 mg delayed release tablets of Diclofenac Sodium (Non-Steroidal Anti-inflammatory drug), which improves business prospects for this product in US as the company already markets 75 mg tablets. The estimated market size of the product in US is 400 million US dollars.
• It filed an international patent application for novel nicotine formulation which expected to holds good promise for its export business.
• The investment of Rs 40 crore being made by the company during the year in manpower, new marketing & R&D initiatives and modernization of Kadaiya(Daman) and Panoli(Gujarat) facilities will all help achieve future growth.
• A leading South African pharmaceutical company and the Australian OTC major have expanded their business arrangement with the company for purchase of lozenges. It will also commence supplies of lozenges to a UK multinational during the current quarter consequent to successful social accountability audit of the company's facility.

Quarterly Performance:

Total income from operations increased by 10% to Rs 222.16 crore, which include other operating income Rs 5.48 crore (up by 38%) for the quarter ended December 2010. Operating profit margins remained flat at 21.9% on the back of shrink in sales promotion & publicity cost by 760 basis points as percentage to sales and net of stock adjustments. However, consumption cost increased by 750 basis points. In addition, employee cost increased by 230 basis points. Thus, operating profit increased by 10% to Rs 48.69 crore. Other income increased by more than six fold to Rs 1.41 crore.

During the quarter, interest remained almost flat at Rs 1.59 crore and depreciation increased by 11% to Rs 6.02 crore resulted PBT before forex gain to grow by 13% to Rs 42.49 crore. After accounting forex gain Rs 3.42 crore, PBT after forex gain increased by 22% to Rs 45.91 crore. With decrease in tax rate by 450 basis points to 17% resulted net profit to increase by 29% to Rs 38.12 crore.

Nine Months Performance:

For the nine months ended December 2010, Net sales increased by 21% to Rs 608.69 crore on the back of its increased concentration on formulations exports. Operating profit margins decreased by 50 basis points to 22.8% resulting operating profit to increase by 19% to Rs 142.01 crore. Other income increased by more than 15 fold to Rs 3.78 crore. With decrease in interest by 25% to Rs 5.47 crore and increase in depreciation by 6% to Rs 16.97 crore, PBT before forex loss was up by 27% to Rs 123.34 crore. After accounting forex loss of Rs 0.22 crore and tax Rs 19.69 crore net profit increased by 40% to Rs 103.43 crore.

Other information:

• The promoter shareholding declined from 55. 57% as on 30th December 2009 to 55.45% as on 30th December 2010.
• The scrip is down by 2.75% and closed at Rs 134 at BSE on 13^th January 2011.