Wockhardt - Q2FY13 Consolidated performance - Prime

Wockhardt Pharma (WPL) Q2FY13 performance was above expectations, the company revenues grew by 21.3 per cent on YoY basis led by 47 per cent growth in US business (23 per cent in $ terms). Excluding the impact of nutrition business sale, the revenues of the company grew by 28.9 per cent on YoY basis and 0.4 per cent on QoQ basis.WPL gross margins improved by 787 bps and 889 bps to 69.9 per cent on QoQ and YoY basis respectively.

WPL performance highlights for Q2FY13 are:

- Revenues increased by 21.3 per cent YoY to Rs. 13,474 mn.

- EBITDA at Rs. 5,170 mn was up by 59.9 per cent YoY and 12.1 per cent QoQ basis. EBITDA margins increased by 925 bps and 604 bps to 38.4 per cent on YoY and QoQ basis respectively.

- Depreciation and Amortization was up by 7.4 per cent YoY to Rs.301 mn and was flat on sequential basis.

- Finance cost increased by 6.3 per cent to Rs. 424 mn on YoY basis but declined by 8.5 per cent on QoQ basis.

- Adjusted PAT at Rs. 4,470 mn was higher by 30.3 per cent and 241.2 per cent on QoQ and YoY respectively.

Valuation

At CMP of Rs. 1,706 the stock is trading at 13.0x FY13E EPS and 13.8x FY14E EPS and EV/EBITDA of 10.3x and 10.1x its FY13 and FY14 numbers respectively. Our target price on the stock is Rs. 2,218 at a P/E multiple of 18.0x to its FY14E EPS.

Source : Equity Bulls

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