Cipla - 4QFY2013 Result Update - Angel Broking

For 4QFY2013, Cipla's numbers came in lower than expected on the bottomline as well as the sales front. The net sales and profits for the quarter came in at Rs. 1,906cr (Rs. 2,057cr expected) and Rs. 268cr (Rs. 384cr expected), registering a growth of 5.1% yoy and a dip of 8.3% yoy respectively. On the OPM front, the margins dipped by 83bp yoy for the quarter at 18.3% vs 19.1% expected. For FY2014, the management has given a revenue guidance of 12-14% yoy, with EBITDA margins estimated to be around 21%-22%. We recommend a buy rating on the stock.

Results lower than expectations: For 4QFY2013, the company reported lower-than-expected numbers on the bottom-line front. The net sales and profits for the quarter came in at Rs. 1,906cr and Rs. 268cr, registering a growth of 5.1% yoy and a dip of 8.3% yoy respectively. The gross margin and operating margin came in at 60.9% and 18.3%. Consequently the net profit came in at Rs. 268cr, lower than the expectations mainly on the back of the lower-than-expected OPM and sales growth.

Outlook and valuation: For FY2014, the Management has given a revenue growth guidance of 12-14% and guided EBITDA margins to be at 21-22%. We expect the company's net sales to post a 14.1% CAGR to Rs. 10,535cr and EPS to record a 7.4% CAGR to Rs. 22.2 over FY2013-15E. We recommend a Buy on the stock.

Source : Equity Bulls

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