J B Chemicals and Pharmaceuticals has posted strong growth in bottom line during the first quarter ended June 2013 and its net profit went up by 371 per cent to Rs.20.33 crore from Rs.4.31 crore in the similar quarter of last year. Its EBDITA also up by 84.7 per cent to Rs.41.90 crore from Rs.22.68 crore. Its net sales increased by 24 per cent to Rs.229.17 crore from Rs.184.85 crore. With smart gain in profits, its EPS moved up to Rs.2.40 as against Rs.0.51 in the lat period.
The company's domestic formulations business improved by 18.5 per cent to Rs.94 crore due to actively promoted product group achieved growth of 22 per cent. The management has decided to consolidate in the domestic market by harnessing the potential of the existing products basket, enhanced penetration in tier II cities and rural market, selective new product launches and focus on increase in productivity. These measures being pursued through last 8 quarters have started delivering satisfactory result. Even though domestic market presents severe competition, the company is confident of successfully meeting the growth challenges.
The formulation exports registered strong growth of 27.6 per cent to Rs.109 crore. The exports of formulations to Rest of the World markets registered growth of 19.8 per cent in Rupee terms and 15 per cent in US Dollar terms. The strategy in this business is to focus on contract manufacturing opportunities with continued focus on niche branded generics. Presently, contract manufacturing provides good revenues in this segment due to state-of-the-art manufacturing facilities, some of which are approved by international health authorities. The company plans to leverage this strength by building on lucrative contract manufacturing opportunities.
The export of formulations to Russia-CIS region registered growth of 74.5 per cent. The company is now planning to market the formulation products in Russia-CIS region by a subsidiary company in Dubai. This change is expected to become operational during the current year.
The supply arrangement with Cilag GmbH International, a Johnson Johnson affiliate has been functioning smoothly. These sales registered growth of 15.5 per cent during the quarter and the relationship with J&J entities is expected to further growth in the coming years.
The sales of APIs registered smart growth of 61.7 per cent to Rs.22.74 crore during the quarter under review.
As per settlement agreement dated July 16, 2013, the company and Cilag GmbH International (Cilag) have mutually arrived at a settlement of claims raised by Cilag in connection with transaction of sale of Russia-CIS OTC business undertaking by the company. According to this settlement, the purchase price paid by Cilag has been revised downward by Rs.64.50 crore. Accordingly, an amount of Rs.64.50 crore has been released to Cilag from the Escrow Account and balance amount of Rs.73.07 crore has been released to the company from the said Escrow Account. Consequent to this release, the Escrow Account now stands closed.