H1FY21 Company Update - P&G Health - ICICI Direct

P&G Health reported a decent H1FY21 performance with revenues growing 9.1% YoY to Rs. 504 crore due to increase in demand for vitamins, minerals, supplements and medicinal products amid the pandemic. EBITDA margins jumped significantly from 21.4% in H1FY20 to 33.1% due to significantly lower other expenditure and higher gross margins. EBITDA grew 68.7% YoY to Rs. 167 crore. PAT grew 71.9% YoY to Rs. 127 crore in line with a strong operational performance. Note: The company follows July-June fiscal year.

Valuation & Outlook

Despite tough market conditions, PGHL has posted a strong first half performance driven by portfolio consumerisation and robust business continuity planning. Additionally, it has posted one of the best margin performances in the recent past resulting in strong profitability. Besides possessing MNC pharma traits like strong brand stickiness, growth, earnings visibility, consistency (despite quarterly fluctuations) in performances, strong b/s, etc, key differentiator for PGHL is that its core category is VMS, which, as a therapeutic category, is likely to be rediscovered amid the current pandemic. PGHL combines the best of P&G and legacy Merck's consumer health capabilities and cultures. On the back of the recent run up in the stock we change our rating from BUY to HOLD with a target price of Rs. 7690 (earlier Rs. 6110) based on 45x FY23E EPS of Rs. 170.9.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PGHealth_CoUpdate_Feb21.pdf

Shares of P&G Health LTD. was last trading in BSE at Rs.7369 as compared to the previous close of Rs. 7413.2. The total number of shares traded during the day was 974 in over 406 trades.

The stock hit an intraday high of Rs. 7460 and intraday low of 7351.1. The net turnover during the day was Rs. 7221357.

Source : Equity Bulls

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