Pfizer has reported a 27% rise in the net profit on the back of a 11% growth in the turnover. While the detailed results are awaited, a part of the rise in the net profits could also be due to lower write off of the VRS expenditure in the current year.
Last year the company wrote off over Rs 34 m as VRS expenditure and we expect the current years write off to be in the range of Rs 16 m. If one were to exclude this, on a comparable basis Pfizer’s net would have grown almost 20%.
Profit after Tax/(Loss)
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The relatively lower growth in the company’s topline has to do with the fact that the company’s B–complex vitamin ‘Becousules’ was brought under price control early this year. Becousules contributes around 20% to the company’s turnover and the National Pharmaceutical Pricing Authority has reduced its prices by 30% in the current year.
However, the company’s Hepatitis B brand ‘Hepashield’ has done very well in the current year. This has also helped the company to reduce its dependence on its six brands. (In India six brands viz. Becousules, Lorex, Protinex, Dolonex, Terramycin and Minipress XL account for 80% of the company’s sales.)
The stock quotes at a price of Rs 587, which implies an earnings multiple of 34.7 times FY01 earnings.
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