Ajanta Pharma, a Rs.675 crore plus Mumbai based phama company, has established its strong presence in emerging markets of Asia, Middle East, Africa and Latin America and set to launch its first product in USA in the current year. After registering impressive growth of top line and bottom line during the year ended March 2012, the company continued same trend in the first quarter ended June 2012. In order to improve the liquidity of its shares in the stock market and to make it affordable to the small investors, the management decided to split its equity share of Rs.10 each into two equity share of Rs.5 each from August 10 2012. The scrip was trading at Rs.300 at the beginning of 2012 and currently moving in the range of Rs.700-750 on BSE with strong investment support from investors.
Ajanta Pharma registered strong performance in the first quarter ended June 2012. Its net profit has taken a jump of 56.3 per cent to Rs.19.58 crore from Rs.12.53 crore in the corresponding period of last year. Its net sales went up by 34.9 per cent to Rs.171.79 crore from Rs.127.31 crore. Though its interest cost went up to Rs.15.95 crore from Rs.2.81 crore in the last period mainly due to loss on foreign currency loans borrowed by the company. However, same is set off to major extent through a gain on foreign currency debtors outstanding, which is included in other income. Its other income increased to Rs.9.76 crore from Rs.0.57 crore. Earnings per share for the quarter improved to Rs.16.72 as compared to Rs.10.70 in the last period.
The promoters are holding over 70 per cent of equity stake and Indian public around 23 per cent. Private corporate bodies are holding 5.7 per cent. The company declared equity dividend of 75 per cent absorbing an amount of Rs.8.78 crore.
The company is now planning to invest Rs.400 crore in next two years for setting up two separate manufacturing facilities – one for regulated markets and other for domestic and emerging export markets. Currently it has four manufacturing facilities in India with three catering for formulations and one for APIs. Further, its subsidiary has one formulation manufacturing facility in Mauritius. Its one facility received US FDA approval and received approval for two ANDAs with another seven pending.
The company's consolidated net sales increased 35.8 per cent to Rs.677.40 crore during the year ended March 2012 from Rs.498.83 crore in the previous year. Exports contributes more than 60 per cent of the company's revenue. The consolidated net profit went up sharply by 52.4 per cent to Rs.77.27 crore from Rs.50.71 crore. Its EBDITA increased by 48.2 per cent to Rs.146.96 crore from Rs.99.16 crore. With smart gain in profits, its earnings per share improved to Rs.65.99 from Rs.43.31 in the last year helping Ajanta scrip to move forward.
The standalone net sales reached at Rs.604.27 crore during the year ended March 2012 as compared to Rs.458.16 crore, a growth of 31.9 per cent and its exports on FOB touched to Rs.342.69 crore as against Rs.261.86 crore. Thus, exports contributed almost 57 per cent to its standalone net sales during 2011-12.
As against the equity capital of Rs.11.80 crore as at the end of March 2012, its reserves and surplus touched to Rs.286.23 crore as against Rs.217.03 crore in the previous year. Its total borrowings increased to Rs.100.59 crore from Rs.75.64 crore. The company's net fixed assets are going up steadily and worked out to Rs.248.63 crore as compared to Rs.231.25 crore. Its inventories surged by 48.3 per cent to Rs.167.80 crore from Rs.113.12 crore.
The company has set up four subsidiaries including one step down subsidiary. Its total investment amounts to Rs.17.05 crore in subsidiaries and one associated company. The performance of its subsidiary in Mauritius had been excellent and the step down subsidiary in Philippines has improved its working with profit for the first time. Its US and UK subsidiaries continue to assist in regulatory work for product registrations. However, its joint venture in Turkmenstan continues to be under performing and the company is considering exit options from this joint venture.
The company is now stepping up its investment in R&D and its R&D expenditure as a percentage of total turnover worked out to 6.5 per cent during the year ended March 2012. R&D expenditure reached at Rs.39.54 crore. Its R&D facility in Mumbai has been approved by DSIR and more than 200 scientists are working for API and formulation development. With the help of R&D, Ajanta launched 24 new products in domestic market. It filed 330 new products registration dossiers in emerging markets. Further, it has successfully scaled up six APIs and transferred to plant and development of five new APIs in pipeline. Ajanta has 1467 product registrations in hand as at the end of March 2012 and 1252 products under registrations in different countries.
Thus the long term investment plans in new facilities and R&D should give a boost to its business operations in the coming years. The product launch plan in regulated markets like US will add significant revenues and profits.
Performance Highlights (Consolidated)