>Indian Telecom Sector : GSM Operators (Circle wise wireless (GSM) subscriber numbers as at the end of Jan 2012)

Key Highlights
■ The GSM operators added 8.44 mn new subscribers in January 2012, taking the total GSM user base to 648.08 mn in the country, according to the COAI data. During the previous month the subscriber addition was 7.55 mn.


■ Uninor added the most 2.49 mn subscribers in January 2012 taking its total subscriber base to 38.80 mn; on the other hand Idea Cellular added 1.75 mn new subscribers during the month to take its total subscriber base to 108.13 mn.


■ Bharti added 1.3 mn subscribers, taking its total subscriber base to 176.95 mn users. The GSM subscriber market share of the company dropped marginally to 27.30% in January 2012
compared to 27.46% in December 2011.


■ Vodafone Essar added 8.6 lakh users in January 2011 against 9.1 lakh addition in December 2011 to take the company's total subscriber base to 148.60 mn. The market share of the company dropped to 22.93% in January 2012 from 23.10% in the previous month.


■ Aircel added 8.2 lakh new customers during January 2012 compared to 6.9 lakh in December 2011 while Videocon added 4.1 lakh customers taking its subscriber base to 5.85 mn.


■ The subscribers from the 'B' and 'C' circle constituted 54% of the total GSM subscriber base in India. Both these category circles put together witnessed 4.69 mn subscriber additions during the month of January 2012 as compared to the previous month.


■ The 'Metro' and 'A' circles added 3.76 mn subscribers during the month constituting 44% of the total subscriber net addition.


■ Idea Cellular, Uninor and Videocon gained subscriber market share by 5 bps, 31 bps and 5 bps respectively during January 2012 to take their respective GSM subscriber market share to 16.68%, 5.99% and 0.9% respectively.


■ The industry is set to witness significant change in the months ahead following the recent license cancellation order by the Supreme Court. The Supreme Court recently cancelled 122 2G licenses of many operators granted during 2008 by the former telecom minister A Raja.


■ Incumbents continue to face huge regulatory uncertainty pertaining to the one time excess spectrum charges that the incumbents have to pay for spectrum they hold in excess of 6.2 MHz in each circles, legal validity of the 3G roaming agreement that the incumbents have entered among themselves for offering 3G services in circles where they do not have the required license and spectrum (issue is pending with TDSAT for final hearing) and various other issue. 


■ Despite such extreme regulatory uncertainty and flip-flop we are positive on the operational performance of the mobile operators under our coverage (Bharti Airtel and Idea Cellular). Maintain our 'Buy' rating on both Bharti Airtel and Idea Cellular with the target price of Rs 495 and Rs 133 respectively.

Circle wise wireless (GSM) subscriber numbers as at the end of Jan 2012
RISH TRADER

>EXPECTATIONS FROM THE UNION BUDGET 2012-13

The Union Budget for 2012-13 (FY13) is to be presented in the Parliament on 16th March. This will be a critical Budget as it sets the tone for policy stance relating to not just fiscal issues but also monetary policy and economic reforms. Also, it is being announced at a time when the economy has shown distinct signs of a slowdown and is looking for a boost from the government through appropriate policy announcements. Global as well as the domestic investors would also be looking for signals.


The theme of the FY13 budget would be on:
■ Striking a balance between fiscal consolidation and public spending while maintaining sustainable inclusive growth
■ Focusing on growth in rural areas and provision of more education and health facilities through centralized sponsored schemes
■ Focusing on increasing infrastructure investment
■ Moving towards implementing GST and DTC

•          Revision of tax slabs, rates and so on

Projections made in the Union Budget for 2011-12:

India’s fiscal deficit was targeted at 4.6% of the Gross Domestic Product (GDP) for FY12 at the beginning of the year. However, on account of a sharp increase in expenditures and fall in revenues as a result of higher spending on oil subsidies and other social spending programs, as well as lower tax collections due to the slowdown in the economy, fiscal deficit is likely to slip to 5.5-5.7% of GDP.


India’s fiscal deficit has already reached 92.3% of the targeted budget in the first nine months of FY12. As of December 2011, the amount of fiscal deficit reached Rs. 3,81,012 crore, an increase of 122% from the same period last year.


Total expenditures amounted to Rs. 8,96,361 crore during the Apr-Dec 2011 period, 71.3% of the FY12 budget estimate. Meanwhile, revenue is falling short of the target. This amount includes Rs. 4,20,414 crore of taxes collected, which was merely 63.3% of targeted tax revenues.


Further, the Government is set to borrow beyond its target for FY12. At the beginning of the year the Government estimated gross borrowings to the extent of Rs. 4,17,128 crore. However, on account of the developments in revenue collection and expenditure, the Government increased its borrowings programme by about Rs. 90,000 crore. Borrowings for the period of 1st Apr- 17th Feb FY12 stood at Rs. 4,75,000 crore. While it is not clear whether the additional borrowing of Rs 90,000 crore includes the slippage on account of disinvestment, it may be assumed that this amount could go up in case this programme does not fully fructify.


Macro-economic environment:
The economic conditions in India during FY12 have been challenging with the development of a sharp trade-off between inflation and growth being the driving factor. Policy formulation has been difficult on account of the persistently high inflation and slowing industrial growth clubbed with sluggish investment climate in the country. Further, volatility in the foreign exchange market has added to the difficulties of the policy markers.


Based on CSO’s projections for the year, industrial sector growth is expected to be subdued this year with manufacturing growing at 3.9% as against 7.6%, construction at 4.8% compared with the 8.0% growth in FY11 and the growth in mining and quarrying is likely to be negative 2.2% as against the 5% growth in the previous year. Service sector has acknowledged robust growth of around 9% throughout the year while electricity, gas and water supply segment is to register 8.3% growth this year. GDP growth would be 6.9% as against 8.4% last year.


Inflation has been persistently high around 9% throughout 2011 and it is only from December onwards that there has been a decline in the prices of primary articles, taking the headline inflation down to 6.6% for January compared to 9.1% for November. The declining trend in the food inflation is likely to help bring down Wholesale Price Index (WPI) though admittedly the base year effect has moderated such increases. However, though core inflation has started to come down since January, it needs to be tracked for some more time before we are confident that it will remain at lower levels. Therefore, RBI will lower interest rates only after it is convinced that inflation has come down permanently.


Monetary Policy Outlook:
So far in the current financial year, the major driving factor for the RBI’s monetary policy had been the growth-inflation trade-off. However, in recent times the persistent deficit in liquidity conditions and the volatility in the exchange rate have also called for the Central Bank’s attention.


RBI in its recent monetary policy review cut cash reserve ratio (CRR) by 50 bps in order to ease the prolonged tight liquidity conditions prevailing since November. The 50 bps cut in the CRR (to 5.5%) would infuse approximately Rs. 32,000 crore into the banking system. The RBI has also infused liquidity into the system through Open Market Operations (OMOs) to the extent of Rs. 95,190 crore so far in the financial year (as on 10th February 2012). Further, the RBI has indicated that it would conduct more rounds of OMO auctions as and when the need arises.



Budget expectations:
Expectations from the Budget should be looked at against the overall macro economic background. Further, while the two major tax reforms, i.e. direct and indirect taxes have been defined broadly by the DTC and GST, modifications in the present system have to be consistent with this overall framework.


Growth
The Government’s objective in the budget should be regaining the growth momentum. It is expected that recovery in economic growth would be possible by the second half of FY13 if the global economy starts mending from the slump and monetary easing by India’s central bank starts early next fiscal. Growth target for this year would be around 7.5% with inflation of around 6-6.5%, thus implying a nominal GDP growth of 13.5-14% for the year. This will be lower than that in FY12 which is 16.1%.


Fiscal Consolidation
It is important to understand that the deterioration in fiscal health cannot be repaired in a single year. The Government is expected to bring fiscal deficit under control over a period of time and provide a realistic roadmap rather than ambitious, unattainable target. Therefore, transition to the FRBM will be in a phased manner. Overtime, not only the ratio of Fiscal Deficit to GDP should be reduced, but the composition also needs to be changed and without expenditure restructuring, fiscal consolidation cannot be successful. The fiscal deficit ratio would be targeted at around 5% of GDP, which will be an improvement over the revised estimate of 5.5-5.7% for FY12.


Taxation
Given that there is a possibility of slippages in the fiscal targets of the Government for FY12 and the fall in tax collections during the first nine months of FY12, one can expect that the Finance Ministry would try and increase revenue collections by increasing excise duty and service tax from 10% to 12%, therefore also laying ground for a GST at 12%. The other sources of increasing tax collections would be as follows:

• Increasing taxes on cigarettes, etc in order to improve human and fiscal health
• Increase import duty on crude oil from 0% to 5%
• Abolishment of Kerosene subsidy
• A reduction in the overall Cenvat rate may be considered. The revenue risk could be compensated by a non-refundable cess on polluting goods and services.
• Rationalization and simplification in terms of reduction in surcharges for corporates, withdrawal of some tax exemptions and increase in the rate of Minimum Alternate Tax (MAT).

Personal taxation
Deduction under section 80C may be revised to Rs. 1,50,000 from the existing limit of Rs. 1,00,000 to provide enhanced options of investment to the assessee. There could also be some concessions given to interest on bank deposits to encourage savings. The limit of deduction on interest paid against self-occupied property may be revised up to Rs. 3,50,000.



Capital markets
Presently Securities Transaction Tax (STT) paid on purchase or sale of equity shares, derivatives, equity oriented funds and equity oriented mutual funds, etc is not allowed as deduction under the head capital gains, and allowed only under profit and gains from business or profession only if the assessee is engaged in the trading of shares. The STT paid may be included in the cost of acquisition and selling expenses under Capital Gains. This will help the capital market.


Infrastructure
In order to sustain a healthy GDP growth rate, equivalent investment in infrastructure is required. The Government can undertake several measures in order to encourage investment in infrastructure sector. A few have been noted below:
■ Focus on fiscal incentives, which help in increasing the infrastructure spending in the country. For e.g.: 80 CCF tax benefit/rebate up to Rs. 20,000 on investment in infrastructure bonds need to be increased to Rs. 1,00,000.
■ Increase in outlay to Jawaharlal Nehru National Urban Renewal Mission (JNNURM). This will not just lead to higher investments but also bring about improvements in the quality of urban infrastructure.
■ Specialized institutions should be allowed to fund infrastructure projects as most banks are ill-equipped as it creates inherent Asset –Liability Mismatch (ALM) issues.


Banks
It has been observed that most banks are not well equipped for project financing as it creates ALM. In other words, bank deposits are of shorter duration while project financing is longer term. Therefore, the budget could provide an incentive to lengthen bank deposit maturity structure by offering fiscal concessions to bank deposits of maturity of 3 yrs and above instead of the 5 yrs and above currently.


Agriculture
The Agriculture Ministry has demanded lowering of interest rates on crop loans to 3% from 4% for those farmers who pay in time. Ministry has also suggested that the target of credit flow to agriculture sector by banks and FIs be retained at Rs. 4,75,000 crore in FY13 as well. Further, strong emphasis is laid on rural infrastructure to provide impetus to rural demand.


Food Security Bill
The Finance ministry should roll out the Food Security Bill in the Budget FY13. It is believed that the implementation of the bill would take place in the later part of FY13. However the allotment of around Rs. 5,000 crore could be made in the Budget itself. Currently the food subsidy stands at Rs. 63,000 crore and the Ministry expects that the subsidies provided under this Bill would increase the expenditure to the extent of 2% of the current expenditure.



Small and Medium Enterprises (SMEs)
Access to finance can be enhanced by making NBFCs a vital intermediary financial institution for micro and small enterprises. These enterprises need to be actively promoted through supportive policies. Support through venture capital and private equity funds, SME dedicated banks, securitization of trade receivables and SME exchanges/ platforms would help this sector.


Health care
The Budget should raise the healthcare expenditure to a sizeable portion of the Gross Domestic Product (GDP) from 1.9% to 3.5% and target 5% in the budget of FY14. The Government should also reduce import duty on sophisticated medical equipment for India to be at par with the rest of the world and provide incentives for doctors who work in rural areas.


Real Estate
The Union Budget could target increasing business friendliness of the Indian tax administration and relax norms for repatriation of FDI in real estate. In case of SEZs clarity should be provided on its status in the light of the Direct Tax Code (DTC). For residential housing, scope of the1% subsidy announced last year should be amplified and broadened to include a wider price band to benefit home buyers, especially in lower income groups.


Power
The power sector would be expected to get some relief especially in terms of assistance on the interest to be paid on borrowed capital. The sector is under pressure of high bank debt which is difficult to service given the cost and pricing structures presently in the country. Restructuring of State Electricity Boards (SEBs) would be high on the agenda of the Budget given their tenuous state of financial health.


Defence
In order to modernize and strengthen the armed forces, India’s defence budget for FY13 is likely to touch Rs. 2,00,000 crore as against Rs. 1,64,415 crore, which was 2.5% of the GDP for FY12. The defence budget for FY12 had seen a 11.6% hike and if the trends and the need of the Armed Forces is to continue in FY13, as there is need to modernise against the background of political developments across our borders.


Pharmaceuticals
Excisable goods used for R&D purposes could be exempted from Central Excise Duty besides import of all capital goods, raw materials, consumables. Even reference standards for R&D purposes to be fully exempted from customs duty and other related duties. This will definitely boost R&D activities significantly. The Budget can provide a new drug delivery system by extending weighted deduction for R&D activity beyond 2012, giving incentives for core R&D activity players as well as incentives for expenditure incurred overseas.


Disinvestment
This would once again be important for the government and the decision on the 2G spectrum could also lead to some action on further auctions in this field. Disinvestment targets could be pegged to the last year’s level of Rs. 40,000 crore on the back of an assumption of a recovery in the economy and the markets recovering.


Subsidies
Bringing down subsidies would be a challenge, and while the Budget will plug it at a level lower than the revised number for FY12, there will be a move to open up prices of petro products, which will result in higher prices of diesel and petroleum to begin with.


RISH TRADER

>INDIA STRATEGY: Uttar Pradesh State Elections(February 2012): Too Close to Call

We hosted Dorab Sopariwala, India's leading psephologist, on a call with investors: The topics were the ongoing state elections, the likely results, and their implications for national politics. Here is a synopsis of the discussion.


UP elections – by the far the most crucial: Of the five states going to poll, Uttar Pradesh is the most important one given its sheer size. However, the results may be too close to call. No doubt the turnout has increased but seasonally adjusted (given the shift in timing to the winter months), the increase is about 5%. That said, it is hard to tell who has come to vote and hence which party may benefit. Tight fights seem to be of the order given how small vote swings seem to be affecting seat count.


A complex election and difficult result to predict:


• The Bahujan Samajwadi Party (BSP) suffers from incumbency, but Chief Minister Mayawati has tried to overcome it by aggressively churning her candidates. She has also has seemingly delivered by doubling the state's domestic product in nominal terms over the past five years (real growth of around 7%, which is not necessarily a strong relative performance). Still, there could be voter fatigue due to corruption allegations.


• The Samajwadi Party (SP) has a fresh tailwind with Akhilesh Yadav and does not have the headwind of being an incumbent as it did in 2007. If the results are close, Ajit Singh's party (currently a Congress ally) could play a prominent role in government formation.


• Both the Congress and the BJP suffer from lack of local leadership and grassroots presence in the state. The reason UP elections get complicated is that it is a four-way fight, unlike most other states which are straight fights and hence easier to predict.


To read the full report: INDIA STRATEGY
RISH TRADER

>GREED & FEAR: Bullet dodged (CLSA)

Lugano


The Greek bullet has been dodged for now though the scheduled April elections in Greece remain an obvious stumbling block. Accordingly, GREED & fear’s base case remains with the “risk on” trade which means that any pullback in equities should be bought. A potential moderate disappointment for the markets may be that the LTRO-2 is not quite as large as previously expected because of the apparent reluctance of the big German and French banks to be seen taking up the carrot of generous ECB funding. For this reason the amount raised may be less than the €500bn-1tn previously guesstimated.


Still this will not be enough to end the “risk on” rally since those banks that really need the funding, or the profits from the carry trade like the Italian and Spanish banks, seem likely to participate again. Meanwhile, it is a telling sign of improving market conditions that Italian bank Intesa Sanpaolo was able this week to issue an €1bn unsecured bond with a five-year maturity, following its successful issuance of €1.5bn in unsecured 18-month bond at the end of January. Such longer term funding would have been impossible prior to the LTRO.


It also continues to be clear that Flexible Mario would like all the major European banks to take advantage of the LTRO. Indeed the ECB stance towards the banks is increasingly likely to be either take funding from the LTRO or raise equity, rather than the other option of pursuing deleveraging and balance sheet contraction. While, as previously noted here, it is also likely that the European Banking Authority (EBA) will come under growing pressure to relax its capital requirements even if nothing specific appears to have been announced yet.


To read the full report: GREED & FEAR
RISH TRADER

>BANKING SECTOR: Recommendations on Priority Sector lending by Nair Committee

The Reserve Bank of India (RBI) on 21 February 2012 released the report of the Committee headed by Mr. M V Nair which was constituted to re-examine the existing classification and suggest revised guidelines with regard to priority sector lending and related issues. The RBI has sought recommendations from various stakeholders by March 31, 2012.


We believe that the recommendations are broadly towards directing the credit flow to the economically weaker sections of the society and can be fairly achievable in a phased manner on overall basis given the timeline for implementation. The overall targets for PSL have been retained with certain new sub-segment targets introduced, which intend to improve the lending towards agriculture segment, ensure appropriate monitoring mechanism and change of methodology for calculation of shortfall to make it more effective and transparent. We believe that the recommendations are neutral for public sector banks and more on the negative side for private banks since they may fall short in meeting many new sub-targets given that the current lending towards such segments is already at the lower end. While the introduction of the guarantee scheme for SFMF, removal of DRI scheme, increasing housing and educational limits under PSL, change in calculation of shortfall and loans to NBFC’s for on-lending, buy-out & securitization classified as priority sector are positives amongst the recommendations, cap of 5% of ANBC for NBFC lending and introduction of sub-segments for meeting PSL targets are some of the negatives.


To read full report: BANKING SECTOR
RISH TRADER

>GLOBUS SPIRITS LIMITED: GSL continues to remain the leader in the Country Liquor (CL) segment in North India

In our Q2FY11 update dated November 26, 2011, (CMP Rs.100.55) we had recommended buying/adding the stock to dips of Rs. 87 for a target of Rs. 120. The stock achieved our target of Rs. 120 on February 6, 2012 and made a high of Rs.129.40 on Feb 10, 2012. It is currently trading at Rs. 121.00.


GSL recently declared its Q3FY12 results and reported net sales of Rs. 152.6 cr. - up 38.0% Y-o-Y and up 15.6% Q-o-Q. The Operating Profit for the quarter was Rs. 19.7 cr in Q3FY12 vis-à-vis Rs. 19.4 cr in Q3FY11 and Rs. 17.3 cr in Q2FY12. OPM for the quarter was 12.8%, 450 bps down YoY and 10 bps down QoQ. The fall in OPM can be attributed to the 81.2% increase in “other expenses” YoY and marginal increase in raw material expense QoQ. The Net Profit for the quarter was reported at Rs. 11.7 cr vis-à-vis Rs. 11.4 cr in Q3FY11 and Rs. 9.7 cr in Q2FY12. Interest expense has risen largely due to capitalization of new capacity and an increase in working capital loans due to higher sales volumes. Increase in depreciation costs YoY is due to capitalization of new capacity since Q3FY11.



Concerns:
• Government regulation is a major concern in the industry. In FY11 the Maharashtra government raised taxes on liquor sales, increasing prices significantly. While this currently has no effect on GSL’s sales, the possibility of a domino effect in the other states is a concern. The increase in excise duty for franchise bottling in Haryana has had a direct negative impact on GSL as Jagatjit has suspended franchise bottling operations till the law is changed in the ensuing Budget.


• The liquor industry is very seasonal. Q3 is the best quarter while Q4 is traditionally a poor quarter due to depletion of stock due to the allocation of liquor sale licenses to retailers in the fresh fiscal year.


• “Other expenses” increased significantly in the quarter to Rs. 46.6 cr from Rs. 25.7 cr in Q3FY11, an 81.2% rise. Other expenses increased significantly in all 3 quarters due to added power and fuel costs during the stabilization period of the company’s newplants. Stabilization is now complete at both the locations and these expenses could come back down in the coming quarters. “Other expenses” also increased as GSL wrote-off ~Rs. 0.5 cr worth of old inventory in Q3FY12.


• Country Liquor (CL) realization has fallen 6.7% in Q3FY12 over that in Q3FY11 because of a change in product mix / packaging mix. However, the 9MFY12 realization remains in line with that last year. GSL is seeking increase in selling price of Country liquor in Rajasthan, Delhi and Haryana and is confident of getting it effective Apr/May 2012.


• While IMFL sales are growing, they are not growing rapidly. IMFL realization fell in the quarter to Rs. 669.6/case from Rs.1118.2/case in Q3FY12 and Rs. 804.2 in Q2FY12. This fall in realization is almost entirely attributable to a change in duty structure in new locations entered in Q2FY12 and product mix.


• GSL’s capacities have risen from 288 lakh BL (bulk litres) to 700+ lakh BL from FY10 to FY12. So far the demand scenario for RS/ENA has been robust. In case there is a slowdown in offtake going forward, GSL could get hit due to higher fixed costs, which may not be fully recovered. Further the plan of GSL to get higher value add for its production by converting more of industrial alcohol into IMFL/Franchisee bottling/Country liquor has been progressing at a slow pace resulting in OPM getting hit and rerating of the stock getting postponed.


• Realization on exports is lower (~10% lower) than that of domestic sales. GSL exports ~2 lakh litres every month. OPM for a quarter could get impacted by the proportion of exports in total sales.


• GSL has suffered a setback in its OPM during 9MFY12 due to stabilization issues of expanded capacity at both the locations. This results in higher power and fuel costs due to frequent boiler shutdowns and restarts, low capacity utilization resulting in higher fixed costs, some quantity of lower quality production resulting in overall realizations getting impacted. While the Haryana expansion was stabilized in H1FY12, the Rajasthan expansion was stabilized only in Q3FY12. In case these issues recur, GSL could get impacted in terms of production and margins.


To read the full report: GSL
RISH TRADER

>RAIN COMMODITIES LIMITED: Expansion plans on track

RCL came out with better than expected set of numbers for Q4CY11 on the back of superlative performance by Carbon Products segment. While the topline was in line with our estimates at INR 1608 mn (up 38% YoY & 24% QoQ) led by 18% YoY increase in CPC volumes, net profit exceeded our estimates to INR 1802 mn in Q4CY11 (despite a forex loss of INR 294 mn due to USD denominated forex loan). Its plans of setting up 35 MW waste heat recovery plant by CY12 remains on track. The company has completed 85% of the buyback program at an average price of INR 31/share till date. We introduce CY13 estimates and maintain a BUY rating on the stock with a target price of INR 71/share.


■ CPC segment on the boil
RCL reported a revenue growth of 38% YoY & 25% QoQ to INR 16079 mn on the back of 41% YoY increase in Carbon Products revenues to INR 13995 mn. This superlative performance was aided by 18% growth in CPC volumes to 533000 tonnes & 24% growth in CPC realisations to $ 512/tn. In CY11, revenue of Carbon Product segment grew by 56% to INR 48292 mn aided by 4% increase in CPC volumes & 43% surge in realisations to $ 468/tn. Demand for CPC is healthy and RCL continues to identify new long-term sources for its GPC supplies worldwide due to its limited availability.


■ CPC EBIDTA/tn to remain between USD$90-100
EBIDTA of CPC segment improved significantly aided by 17% YoY & 11% QoQ increase in CPC EBIDTA margin to $123/tn. Currently CPC prices are hovering ~ $ 500/tn and management expects to negotiate the CPC pricing for H1CY12 in next few days. Although we are expecting some softness in CPC pricing, we expect CPC EBITDA margin to remain in the range of $90-100/tn going forward.


■ Cost pressure continue to dent Cement segment
Cement turnover improved by 20% YoY to INR 2081 mn aided by volume growth of 11% YoY to 523000 tonne & 8% increase in realisations to INR 3978/tn. Cost pressure continues to dent this segment as EBIDTA margin declined by 3% YoY & 22% QoQ to INR 682/tn. Volume is likely to remain muted due to political agitations in the state of Andhra Pradesh.




To read full report: RCL
RISH TRADER

>Dr. Reddy's Laboratories Limited: Entered into an agreement with Teva Pharmaceuticals Inc. (“Teva”) under which the company would supply olanzapine 20 mg tablets to Teva.

■ Q3 FY12 Results Update
Dr. Reddy’s Lab. has reported consolidated net profit of Rs 5129.60 million for the quarter ended on December 31, 2011 as against Rs. 2731.40 million in the same quarter last year, an increase of 87.80%. It has reported net sales of Rs 27691.90 million for the quarter ended on December 31, 2011 as against Rs 18985.10 million in the same quarter last year, a rise of 45.86%. Total income grew by 45.22% to Rs. 27856.70 million from Rs.19183.00 million in the same quarter last year. During the quarter, it reported earnings of Rs 30.26 a share.


■ Net Sales & PAT growth
During the quarter, Net sales rose by 45.86% to Rs.27691.90 million from Rs.18985.10 in the same the quarter last year and the Total Profit for quarter ended December 2011 was Rs. 5129.60 million grew by 87.80% from Rs. 2731.40 million compared to same quarter last year.


■ EPS
Due to increase in equity capital the basic EPS of the company stood at Rs. 30.26 for the quarter ended December 2011 from Rs. 16.14 for the quarter ended December 2010.


 ■ Launched during the quarter
During the quarter, the Company received an approval and was awarded a 180-day period of marketing exclusivity from the U.S. FDA for olanzapine 20 mg tablets (generic version of Eli Lilly’s Zyprexa®20 mg) for sale in the United States. The Company had entered into an agreement with Teva Pharmaceuticals Inc. (“Teva”) under which the company would supply olanzapine 20 mg tablets to Teva.


To read the full report: DR REDDY
RISH TRADER