The Hindu Business Line : Jubilant Q2 profits double on higher sales

New Delhi, Oct. 16 Jubilant Organosys, the pharmaceutical and Custom Research and Manufacturing Services Company (CRAMS) company, has more than doubled its net profits for the second quarter ended September 30, 2007, compared to the corresponding quarter last year.

The company’s half yearly consolidated profits of about Rs 250 crore, has already beaten the full year bottomline of Rs 224 crore for last year.

Consolidated net sales for Q2 have grown at nearly 33 per cent, with domestic and international sales accounting for roughly half each of the Rs 618 crore turnover during the quarter.

The earnings also include other income of Rs 38.5 crore. “We have dollar loans of about $75 million and foreign currency convertible bonds of another $276 million, which gave us a natural hedge for our net exposure of dollars,” said Mr R. Sankaraiah, Executive Director (Finance), explaining the appreciating rupee’s impact on the results.

“The balance 25 per cent of the rupee appreciation was taken care of by our imports, and our earnings in non dollar currencies,” added Mr Sankaraiah. EBITDA margins excluding exchange gains and interest income on unused FCCB funds were at about 19 per cent during the quarter compared to about 17 per cent reported during the corresponding quarter.

The clinical research and services business that Jubilant undertakes for international pharmaceuticals has grown 60 per cent, and accounted for half of its revenues. The CRAMS business is doing particularly well in China.

The market growing at 175 per cent contributed almost a quarter of total sales, said Mr Sankaraiah.

Mr Shyam S. Bhartia, Chairman and Managing Director, and Mr Hari S. Bhartia, Co-Chairman and Managing Director, said CRAMS remained the lead value creator for the company and expressed enthusiasm about the potential of the contract injectables business. The contribution of Hollister, the company they acquired early this year, was also taken note of.

“The results in the Industrial and Performance products business are also giving us reason to be optimistic. They are witnessing much better earnings in the second quarter,” added Mr Bhartia in a statement.