Conference Call      
          Elder Pharmaceuticals
The Company upbeat on recent launches and further plans to launch 7-8 products for H2'FY 12


Elder Pharmaceuticals came out with the financial results for the quarter ended September 2011 and held a conference call on 08th November 2011 to discuss the results and future growth strategies. Mr. Alok Saxena, whole time director and Mr. Suresh Pai, Sr. Vice President, Finance addressed the call.

Key takeaways of the call are:
On Standalone basis, net sales were higher by 24% to Rs 252.84 crore for the quarter ended September 2011 and net profit grew by 39% to Rs 22.39 crore.
Revenues from the domestic business grew by 22% to Rs 244 crore for the quarter ended September 2011, contributing 96% to the total sales.
Revenues from the International business surged by 106% to Rs 9 crore for the same period contributing 4% to the total sales. The robust growth in international business is on the back of commencement of commercial operations in Bulgeria and UK. Further company plans to open in new markets to expand their International business in next two years.
On Consolidated basis, net sales were higher by 57% to Rs 331.08 crore for the quarter ended September 2011 and net profit grew by 41% to Rs 19.35 crore. The healthy performance during the quarter mainly attributed to healthy performance by the key business segments Women's Healthcare, Pain Management, Neutraceuticals and Lifestyle Disease Care.
During the quarter, it has In-Licensed brands such as Somazina and Phytomega, making noteworthy contribution to revenues. The newly added Shelcal K, Somazina Pus and I-Vit Plus are on a growth trajectory and have witnessed encouraging performance.
The better product mix and effective rationalization of marketing expenses despite rise in interest costs has resulted in 41% growth in net profit to Rs 19.35 crore.
Other income during the quarter comprises of Interest received, insurance claims received, miscellaneous income and duty draw back.
During the quarter, The Staff cost increased on the back of addition of manpower in sales and marketing team as well as hike in staff salaries. Further, the increase in other expenditure was mainly due to increase in Traveling Allowance and also due to the increase in oil prices, however, this increase was compensated by lower utilization in selling expenses.
Interest costs were higher during the quarter primarily due to the company's borrowings attributed to integration of the Cephalosporin block in the Langa road facility and increase in lending rate of the banks.
The Women's healthcare segment has witnessed a robust growth of 19% to Rs 59.46 crore for the quarter ended September 2011, contributing 24% to the total sales.The Shelcal remains the lead value creator. Further, the Shelcal extensions Shelcal CT and Shelcal OS is gaining considerable traction. Meanwhile, the newly launched Shelcal K and Shelcal HD are further assisting in boosting brand Shelcal. Apart from these, Deviry, B-Long and Bonviva also include in the category of key brands.
The Neutraceuticals segment recorded a healthy growth of 19% to Rs 21.82 crore for the quarter ended September 2011, contributing 9% to the total sales . The Key brands like ElderVit, Phytomega an in-licensed brand are key contributors for this division. Also, Ecozyme, I-Vit Plus as well as Pepamino and (newly launched) D-360 are expected to boost earnings going further.
The Pain Management grew by robust 30% to Rs 26.70crore for the quarter ended September 2011, primarily driven by good growth from the key brand Chymoral contributing 11% to the total sales.Further,Chymorla Plus an extension of predecessor Chymorla has been well received and alsorecently launched Eltrodar GM is expected to bolster performance of this division.
The Anti Infectives segment (15% to total sales) reported a growth to 16% to Rs 37.35 for the quarter ended September 2011, on the back of robust performance by key brands such as Cefixime, Formic and its line extension formic –O. The Life style disease care segment witnessed healthy growth of 20% and stood at Rs17.79 crore for the quarter ended September 2011 accounting about 7% to total sales.The growth was driven heavily by promotional inputs and the fairly long gestation period for the product. Further, a major brand in this category Carisure a cardiovascular product is on a growth trajectory. Moreover, it expects newly launched Somazina, Hibor and Carnisure A are expected to boost the performance of this division going forward.
The manufacturing facility at Langa road, Dehradun is currently contributing around Rs 5 crore per month and going ahead expected to contribute about Rs 8 crore sales per month.
The tax rate expected to be 20% for the FY12.
The Consolidated Debt to Equity ratio stood at 1.20 and Standalone Debt to Equity ratio stood at 1.06 as on 30th September 2011.
The Company is bullish on the recently launched Elfecol Tablet, D-360 and Carnisure A. Further,it plans to launch 7-8 products in the H2FY12.