PRESS RELEASE

Nicholas Piramal reports audited Q2 FY2006 results; Sales down 2.0% to Rs. 3.5 billion, Net Profit up by 0.9% to Rs. 549.0 million

Nicholas Piramal announces it expects to sign five new, long-term custom manufacturing agreements by end November 2005

Mumbai, 20 October 2005: Nicholas Piramal India Limited (NPIL) today reported second quarter (Q2) audited results for FY2006.

Net Sales for the quarter ended 30 September 2005 were Rs. 3.5 billion, while PAT was Rs. 549.0 million. This represented degrowth of 2.0% in Sales and growth of 0.9% in PAT over the previous year’s quarter.

During the second quarter, domestic formulations witnessed significant portfolio disturbance due to Valdecoxib withdrawal, spin-off of the Rs. 160 million Carex division, and the unfortunate controversy that had affected Phensedyl. As a result, NPIL registered a (5.6)% drop in Domestic Formulations Net Sales to Rs.2.6 billion. 

Sales of Phensedyl, a leading brand of the company, were adversely affected during Q2FY06 due to an unfortunate controversy. As Phensedyl contains codeine derived from a narcotics origin, the Narcotics Control Bureau (NCB) initiated investigation into the sale of the product.

NPIL vigorously contested the action of NCB in the Courts, and was successful, but only after a couple of months in establishing that Phensedyl is not a narcotic drug under the NDPS Act.

NPIL has since initiated extensive confidence-building initiatives among the trade channel, and has also actively commenced brand-rebuilding measures. NPIL expects to bring the brand to normalcy over the coming quarters.

Due to the lower Sales, Operating Margin during the second quarter was lower at 17.6% compared with 22.0% in Q2FY05.

The Company’s Exports however, continued to grow well. During the quarter, NPIL exports grew 21.6% to 533.6 million.

Nicholas Piramal also announced today that it expects to sign five new, long-term Custom Manufacturing agreements by end-November, 2005. The Company said that it is also actively working on gaining a global footprint in the Custom Manufacturing segment.

For further information contact:

Vijay Sathye
Vice President - Investor Relations and M&A
Nicholas Piramal India Limited
Mobile: +91-9821879774

* The results in the press release are on Standalone Audited basis. Stand Alone Accounts represent results without considering Joint Venture and Subsidiaries.