Unichem Laboratories Ltd - Pricing policy implementation to limit stock upsides - Emkay

Reco: HOLD
CMP: Rs 164
Target Price: Rs 184

- Unichem's Q1FY14 Results came below our estimates – a) Revenues at Rs2.7bn (flat yoy) b) EBITDA at Rs509mn (up 6% yoy) and c) APAT at Rs360mn (up 9% yoy)

- Domestic formulations business muted growth of 4.2% on account of lower off-take due to NLEM led inventory re-shuffling. Exports formulations business declined by 14.2%

- Going ahead – Domestic formulations business expected to grow at 7% in FY14E. Export formulations FY14E growth expected 6% due to weaker sales in contractual business

- Gradual margins expansion in FY14E & FY15E with stronger sales in UK & US, but pricing policy headwinds would keep the stock upsides limited. HOLD, TP of Rs.184

Source : Equity Bulls

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