Wockhardt - Strong performance continues - Maintain Buy - Emkay

Reco: BUY
CMP: Rs 1778
Target Price: Rs 2160

- Q2FY13 Results above expectations - Revenue grew 21% YoY to Rs. 13.5bn, EBITDA grew by 60% YoY to Rs. 5.2bn and APAT up by 57% YoY to 4.0bn

- Revenue growth was led by 47% growth in US business, which was further led by 22% constant currency growth and rest due to rupee depreciation.

- Gross margins improved 900bps YoY and 800bps QoQ to 70% which led to 38% of EBITDA Margins. This improvement was on back of sale of Nutrition business, which had GM of 48% and inventory correction in US

- Going forward - 31% CAGR in Earnings and reduction in net debt to zero will drive the re-rating of the stock from current 15XFY14E to 18XFY14E EPS of Rs. 120. Maintain Buy rating on the stock with target price of Rs. 2,160

Source : Equity Bulls

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