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n Robust revenue growth (up 18% YoY) and strong operating performance (up by 19%) resulted in 30% growth in APAT
n Strong revenue growth was driven by 19% growth in domestic branded formulation business and 41% growth in the US
n Management has re-iterated its revenue guidance of US$1bn for FY11E and domestic growth to sustain at 15% level
n Maintain earning estimates; Downgrade to Accumulate
Domestic formulation and US business aided 18% revenue growth
Revenue for the quarter grew in line with our expectations by 18% to Rs11.2bn, driven
by a) 41% growth in US, b) 27% growth in Latam, c) 54% growth in Hospira JV and d)
19% growth in domestic branded formulations. The growth in the US business was
driven by strong uptake in the existing products and the generic launch of Divalproex
XR. The domestic formulation growth was mainly driven by strong growth in chronic
segments such as CVS and respiratory portfolio, encouraging response of H1N1
vaccine and introduction of 20 new products. Management has indicated that the growth
in the domestic formulation business is likely to be sustained at 15% level. European
generic business registered 11% growth in revenues (in spite of Euro depreciation) on
account of strong traction in France. The Lat Am business was led by 27% growth in
formulation in Brazil to Rs584mn. Hospira revenues grew 54% as Cadila commenced
shipments of Docetaxel this quarter (PAT contribution of Rs134mn). Going forward,
company expects much higher revenues from Hospira JV on the back of new launches
in US market from Q3FY11E onwards. Nycomed JV reported a decline of 21% to
Rs164mn. We expect ramp-up in Nycomed JV to materialize post the commencement
of operations at its Navi Mumbai facility (most likely by Q1FY12).
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