Claris Lifesciences - Not Rated - Motilal Oswal

CLARIS LIFESCIENCES: Guides double-digit topline growth for CY11, EBITDA Margins at 30%; Resolution of US FDA issues imperative

Topline growth of 1.2% to Rs7.5b was driven mainly by a 5.4% growth in international revenues while domestic sales declined by 4%.

Topline growth was partly impacted by the US FDA import alert (wef May-10) leading to product recalls.

EBITDA grew by 6.7% to Rs2.3b while EBITDA Margins expanded 157bps to 30.3% partly led by better product-mix.

PAT grew 8.4% to Rs1.41b and was partly boosted by 11.6% reduction in interest cost to Rs362m and other income of Rs154m (up 293% YoY).

The company has declared a dividend of Rs2/share. Out of the IPO proceeds of Rs3b, the company has utilized Rs459m for debt repayment and Rs175m for issue expenses. Based on preliminary estimates, we expect Claris to report EPS of Rs24.8 for CY11E (up 12%) and Rs31 for CY12E (up 25%) implying 18% EPS CAGR for CY10-12. Claris stock is valued at 7.7x CY11E and 6.2x CY12E EPS. Not Rated.

Source : Equity Bulls

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