Views on Indoco Remdies 2QFY2016 Result: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking) on Indoco Remdies 2QFY2016 Results:

"For 2QFY2016, the company posted numbers lower than expected. The company posted a 9.4% growth in sales to end the period at INR 248cr V/s INR 272cr expected and INR 226cr in 2QFY2015, on back of domestic and exports posting a growth of 1.2% and 23.6% respectively. In domestic markets (INR 146cr), posted a growth of 1.2% YoY, mainly on back a tepid formulation sales (INR 138cr), a YoY growth of 0.5%, while API sales (INR 7.6cr), posted an 11.7% YoY growth. In exports (INR 101cr), a YoY growth of 23.6%, on back of formulation exports (INR 92.8cr) a growth of 23.7% YoY, while API exports (INR 6.9cr) posted a YoY growth of 3.6%.

On operating front, the EBITDA margins came in at 15.5% V/s 20.9% expected V/s 20.6% in 2QFY2015, on back of lower than expected sales and 28.3% YoY and 82.6% YoY rise in staff expenditure and R&D expenditure respectively. The R&D expenditure during the quarter was 3.6% of sales V/s 2.2% of sales in 2QFY2015. Thus, the Adj. net profit came in at INR 22.6cr V/s INR 33.4cr expected and INR 22.4cr in 2QFY2015, a YoY growth of 0.9%. The lower than expected net profit is on back of lower than expected sales and OPM. On back of valuations, we maintain our NEUTRAL stance on the stock."

Shares of INDOCO REMEDIES LTD. was last trading in BSE at Rs.325.9 as compared to the previous close of Rs. 323.95. The total number of shares traded during the day was 12366 in over 642 trades.

The stock hit an intraday high of Rs. 328.05 and intraday low of 319.95. The net turnover during the day was Rs. 4009507.

Source : Equity Bulls

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