Higher tax outgo suppresses Nicholas' 3Q net - Views on News from Equitymaster

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Higher tax outgo suppresses Nicholas' 3Q net

Jan 25, 2001

Nicholas Piramal has declared a 17.6% growth in turnover for the third quarter ended December 2001. The growth in turnover is on the back of a 7% growth in the two products Haemaccel and Omnatax that the company took over from Hoechst last year. Though the pre–tax margins of Nicholas have jumped 14.8%, a higher tax outgo has only led to a 5.7% growth in the post tax profits.

(Rs m) 3QFY00 3QFY01 Change
Sales 1,127 1,325 17.6%
Other Income 19 19 1.0%
Expenditure 961 1,128 17.3%
Operating Profit (EBDIT) 166 197 19.0%
Operating Profit Margin (%) 14.7% 14.9%  
Interest 30 34  
Depreciation 28 36 28.7%
Profit before Tax 127 146 14.8%
Other Adjustments   -  
Tax 15 27 83.9%
Profit after Tax/(Loss) 112 119 5.7%
Net profit margin (%) 10.0% 9.0%  
Earnings per share* 16.23 17.15  

The company has already introduced 'Aablaquin' its anti–malarial product and 'Rejoint' (a nutraceutical for osteoporosis) in the previous quarter. While 'Aabalaquin' can be expected to contribute substantially to the company's turnover in the coming two quarters during the summer months when the outbreak of malaria is at its peak, 'Rejoint' has received a good reception. The company's anti–infective products have however stagnated.

The stock quotes at a price of Rs 355 which implies an earnings multiple of 21 times 3QFY01 annualised earnings.

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