Views on Indoco Remedies 1QFY2016 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking) on Indoco Remedies 1QFY2016 Results:

"Indoco Remedies, for its 1QFY2016 results, marginally lower than expectations on sales and OPM front, while net profit was marginally above expectations on back of higher other income during the period. On the sales front, the company posted sales of INR 216cr V/s INR 198cr in 1QFY2015 and INR 219cr expected, a 9.1% yoy growth, driven by exports which posted sales of INR 83.8cr V/s INR 69.9cr, a yoy growth of 19.8%. The growth in the exports was driven by formulation, which rose by 23.1% yoy, while the API sales declined by 24.5% yoy. On the domestic sales front, INR 131.6cr V/s INR 127.5cr, a yoy growth of 3.2%, mainly on back of domestic formulation sales growth of 2.3% yoy.

On the operating front, the gross margins came in 64.6% v/s 63.3% in 1QFY2015, an expansion of 130bps yoy, while EBDITA margins came in at 16.3% V/s 18.1% in 1QFY2015, a dip of 180bps yoy against the expectation of 18.0%. This was mainly on back of R&D expenses, during the quarter which came in at 3.0% of sales V/s 2.2% in 1QFY2015. Also, a higher deprecation charge of INR 15cr V/s INR 9.5cr in 1QFY2015; negated the positive impact of higher income INR 7.6cr V/s INR 1.3cr in 1QFY2015. Consequently, the PAT came in at INR 20.3cr V/s INR 20cr in 1QFY2015, a growth of 1.2% yoy. This was against the expectation of INR 26.9cr during the period, mainly on back of lower than expected sales and other income. We maintain our NEUTRAL rating on the stock, on back of valuations."

Shares of INDOCO REMEDIES LTD. was last trading in BSE at Rs.341.6 as compared to the previous close of Rs. 328. The total number of shares traded during the day was 25376 in over 886 trades.

The stock hit an intraday high of Rs. 349 and intraday low of 331. The net turnover during the day was Rs. 8639222.

Source : Equity Bulls

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