Unichem Laboratories - India growth stays in positive territory, but falls tad short - Avenuds

At 9% y-o-y UL's domestic formulations growth during the Dec12 quarter was a tad disappointing. While the momentum was expected to ease during 2H, following the robust 1HFY13 (up c21%) the sluggishness in the broader market dampened growth further.

We maintain that UL's performance in the domestic segment is the lever for earnings and valuation. As the company settles into normalcy and reaps benefits from quarters of restructuring initiatives, we expect a steady earning momentum. The introduction of the new pricing policy is the single largest risk to earnings and valuations.

We retain our Hold rating on the stock with a Dec13 TP of INR194.

Source : Equity Bulls

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