A 223 per cent jump in other income vaulted Cipla's net profit by 144 per cent to touch Rs 70.56 crore for 1996-97. Net sales rose by 25 per cent to Rs 452.06 crore and EPS zoomed to Rs 35.30 from Rs 14.50.
Announcing the unaudited results in Mumbai yesterday, the company said interest income of Rs 18.42 crore was the main reason behind the higher other income. Nearly Rs 90 crore of surplus funds from the rights issue was received last year, which was put in bank deposits to earn higher interest.
The rights issue was listed on the Bombay Stock Exchange on February 18 and the company can now utilise the funds for its expansion plans.
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Net sales rose from Rs 361.12 crore to Rs 452.06 crore. The second half sales of Rs 204.12 crore were lower than the first half performance when sales had touched Rs 247.94 crore. The company also earned a lower net profit at Rs 34.4 crore as compared with Rs 36.16 crore in the first half.
Part of the better performance is due to tighter expenditure control. Against a 25 per cent sales growth, expenditure grew only by 15.6 per cent in 1996-97. Operating margins were much higher at 21 per cent from 14.3 per cent last year.
Sapna Malhotra, an analyst at SSKI, said: "Cipla's export margins are much higher than the domestic margins. The company has a four-fold export realisation this year as compared with realisations from domestic sales. The sales in the first half were better than the second half as the company has a large number of anti-bacterials which have greater sales in summer."
Cipla has a wide range of products in most major pharma categories. Majority of the bulk drug production is used for captive consumption. Analysts said the 21 per cent growth in domestic sales was expected. Cipla paid lower interest this year, while depreciation costs rose only marginally. From Rs 14.95 crore, interest costs fell to Rs 10.5 crore, while depreciation rose to Rs 7.7 crore from Rs 7.11 crore. Higher net profit resulted in higher tax outgo to Rs 31 crore from Rs 7.11 crore.
Analysts said the company paid around 21 per cent tax last year, which has gone up to 31 per cent this year on account of capital gains tax.
Equity remained constant at Rs 19.99 crore.
Scrip up by Rs 43 on BSE
The Cipla scrip posted handsome gains at the major bourses yesterday. At the BSE, the scrip moved up by Rs 43 over the previous close to end the day at Rs 762.25. The scrip opened at Rs 730, which was also the intra-day low, touched a high of Rs 768.50, before slipping to Rs 762.25 at close. At the NSE, the scrip closed at Rs 751.15, a gain of Rs 25.80 over the previous close. The scrip opened at Rs 730, touched an intra-day low of Rs 720 before hitting the upper end of the circuit filter at Rs 751.15, also its 52-week high.
Sanjeev Choithani, chief dealer, Pashupati Advani broking house said: "There has been some short selling at this counter of late and hence the scrip fell below the Rs 700-level last week. Players, who had an indication of the results, have been pushing up the scrip price over the past two days. Since the results have been good, a lot of short covering is expected in the next few trading sessions which will result in the scrip price moving up."