PRESS RELEASE

Mumbai
April 24, 2003

Nicholas Piramal registers record results: Sales up 20%, crossing Rs. 1000 crores for the first time; EPS up to Rs. 41; PAT climbs to Rs. 118 crores; Operating Profit grows 38.9%; Dividend declared 105%

Nicholas Piramal India Ltd. registered strong growth in sales and profits for the Year ended March 31, 2003 (FY03). The company registered Gross Sales of Rs. 11361.3 million (FY02: Rs. 9,464.8 million), a growth of 20.0% over the previous year. The company has improved its EPS Before Extraordinary Items to Rs. 41.0 from Rs. 20.3 in the previous year. OPBIDTA margins as a percentage of net sales have grown to 19.9 % in FY03 from 17.2 % in FY02. ROCE was 32 % while RONW was also 32 % after extraordinary items.

"Through the last 2 years, NPIL has put into place key capabilities that should, in the next few years, make us a leader in the domestic pharmaceuticals market and a substantial player in the export market. We have completely integrated all our acquisitions, realized tremendous efficiencies and grown organically, as reflected by our numbers. This is a significant moment in NPIL’s growth plan," Mr. Ajay Piramal, the company’s Chairman said.

Highlights:
Rs. Million

On a comparable basis, if the sales of Cardex division (the erstwhile pharma division of ICI India Limited) and sales of Global Bulk Drugs & Fine Chemicals Private Limited, which was merged with the Company effective January 1, 2003, were excluded, the gross sales growth would be 11 %.

NPIL’s Domestic Formulations business grew at 19.9%. Excluding the sales gained by the acquisition of the erstwhile pharmaceutical division of ICI Ltd, the formulations business grew 13 % against an industry growth rate of 5.7 % (ORG-MARG MAT, March’03). This business has outperformed industry and grown market share through a combination of new products and innovative brand management. NPIL launched 21 products during the year under review, most of them in high growth lifestyle therapeutic segments such as Oral Anti-Diabetics, Anti-Depressants, Cardio-Vascular and Anti-Arthritics. NPIL’s material cost reduced from 52.2 % of net sales in FY02 to 48.9 % of net sales during FY03.

"Our Company’s medium-term business model envisages achieving leadership in the domestic pharmaceuticals market, and building a strong international business around our core strengths in technology, marketing and manufacturing. The amalgamation of Global Bulk Drugs and Fine Chemicals (GBDFC) with our company has provided us with the core platform to emerge as a competitive player for both on-patent and off-patent APIs in the regulated markets of Europe, US and Japan. The GBDFC plant is among the few in India that has a US FDA Site approval. Our export strategy should provide us with a strong earnings upside and free cash flow in the years to come. NPIL’s track record and credibility of respecting IPR is highly respected," he added.

"We will partner with innovator companies across the entire product life cycle, including the development stage. Our capabilities in manufacturing, process development, IPR protection, business development and supply chain management will be critical to this business. These include not just high quality, low-cost manufacturing, but the ability to manage costs through process innovation and the skills to aid in formulations R&D development and new drug delivery systems," Mr. Piramal said. The company has brought down its interest burden over the last 12 months through a debt reduction of Rs. 525.6 million and the substitution of high cost debt with lower cost debt. Net interest for FY03 has come down 34.4 %, to Rs. 205.7 million. NPIL obtained a tax break of Rs. 264.5 million on account of the GBDFC amalgamation. NPIL has strengthened its balance sheet by fully writing off the unamortized deferred revenue expenditure of FY02 by taking an exceptional charge of Rs. 340.0 million in its P&L for FY03.

An analysis of gross sales: Rs. million

Note:

- Sales for FY02 include Sales of the Pharmaceuticals Division of ICI India Limited for the month of March 2002 of Rs. 37.2 million.

- Sales for FY03 include Sales of GBDFC for the three months ended 31 March 2003 at Rs.186.5 million.

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