Sanofi India - 1QCY2017 Result Update - Angel Broking

For 1QCY2017, Sanofi India posted results which were below expectations on all fronts. The sales came in at Rs. 513cr v/s. Rs. 550cr expected, registering a yoy degrowth of 1.1%. On the operating front, the EBITDA margin came in at 12.0% (17.6% expected) v/s. 17.7% in 1QCY2016. Despite better GPM (Gross Profit Margin), which came in at 54.2% v/s 53.2% in 1QCY2016, the EBIDTA margin was lower, as the other expenses rose by 26.8% yoy, while employee expenses rose by 6.9% yoy. Consequently, the Adj. PAT came in at Rs. 60cr v/s. Rs. 83cr in 1QCY2016, a yoy de-growth of 27.4%. This was against the expectations of Rs. 71cr. We maintain our Neutral rating.

Results lower than expectations on all fronts: For 1QCY2017, Sanofi India posted results which were below expectations on all fronts. The sales came in at Rs. 513cr v/s. Rs. 550cr expected, registering a yoy de-growth of 1.1%. On the operating front, the EBITDA margin came in at 12.0% (17.6% expected) v/s. 17.7% in 1QCY2016. Despite better GPM (Gross Profit Margin), which came in at 54.2% v/s 53.2% in 1QCY2016, the EBIDTA margin was lower, as the other expenses rose by 26.8% yoy, while employee expenses rose by 6.9% yoy. Consequently, the Adj. PAT came in at Rs. 60cr v/s. Rs. 83cr in 1QCY2016, a yoy de-growth of 27.4%.

Outlook and valuation: We expect net sales to post 13.9% CAGR to Rs. 2,862cr and EPS to register 9.2% CAGR to Rs. 153.8 over CY2016-18E. At current levels, stock is trading at 27.2xCY2018E earnings respectively. We recommend a Neutral rating.

Shares of Sanofi India Ltd was last trading in BSE at Rs.4243.95 as compared to the previous close of Rs. 4220.85. The total number of shares traded during the day was 107 in over 35 trades.

The stock hit an intraday high of Rs. 4243.95 and intraday low of 4175.1. The net turnover during the day was Rs. 449674.

Source : Equity Bulls

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