Sanofi India - 2QCY2012 Result Update - Angel Broking

For 2QCY2012, Sanofi India reported in-line results at the top-line, while the net profit came in below expectations. Sales grew by 23.5% yoy, while the net profit declined by 18.5% yoy mainly on back of lower than expected expenses. Given the valuations, we recommend a neutral on the stock.

Revenue growth just in line with expectations: Sanofi net sales grew by 23.5% yoy to Rs.374cr for 2CY2012, in-line with our estimate of Rs.370cr, mainly backed by the domestic segment. The company reported gross margin of 50.5% (50.6%), just in line our estimate of 50.9%. OPM came in at 14.0%, lower than our estimate of 15.8%. Net profit came in at Rs.40.5cr, down by 18.5% yoy, lower than our estimate of Rs.46.4cr.

Outlook and valuation: We expect net sales to post a 17.0% CAGR to Rs.1,682cr and EPS to register a 12.0% CAGR to Rs.104.4 over CY2011-13E. At current levels, the stock is trading at 23.1x and 21.1x CY2012E and CY2013E earnings, respectively. We recommend neutral on the stock.

Source : Equity Bulls

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