Better R&D income led to jump in profits: Dishman Pharma

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Better R&D income led to jump in profits: Dishman Pharma

Managing director of Dishman Pharma tells CNBC-TV18 that higher earnings from its contract revenue business is what led to the surge in third quarter profits.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » Dishman Pharma BSE | NSE 30/05/12 Are Mutual Funds betting on Dishman Pharma?

Managing director of Dishman Pharma , JR Vyas tells CNBC-TV18 that higher earnings from its contract revenue business is what led to the surge in profits. "We had a very good quarter in terms of research income in this quarter and that has taken our EBITDA margins to more than 20%," he said.

Though sales for the third quarter came in below expectations, Dishman Pharma's profit figures surprised on the upside, jumping to Rs 16.7 crore as against Rs 2 crore year-on-year.

Below is an edited transcript of his interview with Latha Venkatesh and Gautam Broker. Also watch the accompanying video.

Q: Your earnings are a pleasant surprise because the street wasn't expecting Rs 16.7 crore profits. Can you take us through what went right?

A: Basically this quarter has been good. We had a better EBITDA even as high as 35% at the stand alone and 20% at the consolidated level as compared to 13% in the previous quarter.

Q: What was the EBITDA margin in Q3? We were expecting somewhere around 16%.

A: We are at more than 20%.

Q: So what's actually led to this improvement in EBITDA margins and are you expecting to sustain?

A: Better R&D income has contributed to this. We had a very good quarter in terms of research income in this quarter.

Q: So basically you are speaking about the contract research income?

A: Yes.

Q: How much did it grow by? What was the contribution?

A: CRAMS income was Rs 169 crore.

Q: Can you just take us through the interest costs as well as what was your EBITDA?

A: On consolidated basis our earnings was Rs 42.39 crore at the rate of 15.97%.