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Nicholas: PBT rises 9%

Jul 26, 2001

Nicholas Piramal has recorded a marginal sales growth of 4% for 1QFY02. Net profit, excluding extraordinary expenses grew by 10.7%. The extraordinary charge of Rs 27 m was on account of VRS expenses. Operating margins improved by an encouraging 120 basis points.

(Rs m)1QFY011QFY02Change
Sales 1,219 1,273 4.4%
Other Income 12 23 95.0%
Expenditure 992 1,044 5.3%
Operating Profit (EBDIT) 227 229 0.9%
Operating Profit Margin (%)18.6%18.0%
Interest 40 35 -12.6%
Depreciation 33 37 10.8%
Profit before Tax 166 181 8.9%
Other Adjustments - 27
Tax 14 12 -14.3%
Profit after Tax/(Loss) 152 142 -6.5%
Net profit margin (%)12.5%11.1%
No. of Shares (eoy) (m) 34.9 34.9
Diluted Earnings per share 17.4 16.3
P/E (at current price) 16

The lackluster growth in sales seems to be on the back of sluggish demand for pharma formulations. Formulations continue to be the core business of NPIL consisting around 75% of the revenues. Vitamin A and premix constitute about 13% of the business followed by diagnostics having 11% share of the totalbusiness. As a strategy, NPIL has decided to discontinue the generics business contributing only 1% tothe revenues.

At the current market price of Rs 255, the stock is trading at 16 times it annualised earnings for 1QFY02. The company's financials are expected to look up on a consolidated basis, especially with recently acquired 60% stake in Rhone Poulenc India Ltd.

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