Conference Call      
          Pfizer
Plans to launch 25 products for this fiscal in Branded generics


Pfizer announced the results for the quarter ended September 2011and held conference call on 25th October 2011 to discuss the results and its future growth strategies. The key takeaways of the call are as follows:

Financial Information:

Net sales were higher by 20% to Rs 271.82 crore for the quarter ended September 2011. However, OPM fell by 420 basis points to 17.8% on the back of higher other expenses resulting marginal 1% decline in operating profit to Rs 51.63 crore. Other income grew by 40% to Rs 22.20 crore. With the 4% increase in depreciation to Rs 2.58 crore, PBT before EO grew by 8% to Rs 71.25 crore. Further, with no EO loss compared to Rs 1.47 crore in the previous period, PBT grew by 11% to Rs 71.25 crore. The effective tax rate rise by marginal 20 basis points to 34% has resulted 11% growth in net profit to Rs 46.99 crore.

As the Company has changed its accounting year, the current quarter is from 1st July 2011 to 30th September 2011 while the previous quarter was from 1st June 2010 to 31st August 2010. The year to date figures for the current year are for the half year ended September 30, 2011 and year to date figures for the corresponding previous period pertains to the six months ended August 31,2010 as the Company. Hence the figures are not strictly comparable.

Highlights of the call:
Net sales grew by 20% to Rs 271.82 crore for the quarter ended September 2011. Further, the price growth is 3% for the quarter and the remaining is the volume growth.
Many MNC players with dominance in specific segments in the Indian markets have significantly hiked prices. This may give good revenue growth in the immediate term, but sooner the competition would drive the market. So, the company has not been aggressively hiking prices, and has made selective hikes depending on the market and the increase in costs.
However, on Comparable basis (like to like) revenues grew by 12%.
The Corex brand grew by 5% and becousules witnessed slow growth during the quarter. Excluding becosules and corex brands, the revenue from rest of the products grew by 17% during the quarter under review.
Going forward, the company expects rebound in growth in becousules and corex brands too.
Other operating income witnessed robust 45% growth to Rs 18.02 crore for the quarter ended September 2011, on the back of income from the Wyeth sales support.
Revenues from Pharmaceutical business grew by 17% to Rs 239.24 crore for the quarter ended September 2011, contributing 83% to the total sales. However, on Comparable basis (like to like basis) it has witnessed 12.5% growth.
Revenues from Animal Healthcare business grew by 13% to Rs 32.58 crore and services business grew by 62% to Rs 17.66 crore for the quarter ended September 2011, contributing 11% and 6% to the total sales.
Its operating profit margins fell by 420 basis points to 17.8% on the back of higher other expenses on account of higher fuel cost. In addition, the raw material cost was also slightly higher during the quarter on account of rise in sugar and paper prices.
Other income grew by the 40% to Rs 22.20 crore for the quarter ended September 2011, and it includes the interest income.
The total field force is at 2500 as on 30th September 2011 and the company expects the productivity improvements going forward on the recent additions.
Amidst sluggish growth in key products, the management has been investing in the past two years towards new additions, new product launches etc. Further, the company expects the consolidation will happen in next few years and is confident of overcoming the temporary slow down.
The Company has launched 11 products during the quarter in the domestic market in the branded generic business. In addition, it has launched 20 products in the previous fiscal and expects to launch 25 products for this fiscal.
The Company maintains separate cold chain for the marketing insulin products, which it recently launched (co-markets) with the Biocon.
The Pfizer and Wyeth business are complimentary to each other and both have their own strengths. The interim strategy would be optimizing the opportunities.
The Cash and bank balances are at Rs 877.17 crore as 30th September 2011 compared to Rs 591.60 crore as on 31st August 2010. The increase in cash on the back of income from the loan repayment as it has earlier funded some Corporate.