Dishman Carbogen

For Q4FY12 the company had a consolidated interest outgo at Rs.22 crore and for FY12, it was at Rs.73 crore. In Q1FY13, interest outgo was up further at Rs.23.13 crore. Its tax outgo was exceptionally high in Q4 at Rs.21 crore  but in current Q1 it has once again come down to normal levels at Rs.5 crore. And it was thanks to this that despite the 10% (QoQ) drop in net sales at Rs.315 crore, net profit was at Rs.38.71 crore, up 24%.

Its main bread winner remains Contract research and manufacturing (CRAMS) business which brings in over 60% of its revenue.  Its ‘others’ includes  intermediates, active ingredients, specialty chemicals, vitamins and chemicals, and traded goods  and this brings in the balance revenue.  In current Q1, CRAMS revenue rose 24% and EBIT rose 270 bps to 24.2%.  In current Q2, with supply of Eprosartanmesylate (EM) active ingredient to Solvay taking off, this segment is expected to do better. The company, as one can see from the huge interest outgo, has a high debt. It has debt of Rs.900 crore on its balance sheet, of which Rs.560 crore is foreign currency-denominated. In the current fiscal, the company hopes to bring down the debt by Rs.100 crore which it plans to raise by selling its 163 hectares of SEZ land in Ahmedabad, which is expected to fetch around Rs.600 crore. Thus the next big trigger for the stock will be when the company announces the sale of this SEZ. The company has guided a 15% growth in topline for FY13, with OPM at 21% and it expects to end the fiscal with a net profit at Rs.100 crore.