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Sanofi India 2QCY2014 performance highlights and results update

July 25, 2014, Friday, 03:22 GMT | 22:22 EST | 07:52 IST | 10:22 SGT
Contributed by Angel Broking


For 2QCY2014, Sanofi India reported better-than-expected numbers, both on the top-line and bottom-line front. It posted sales of Rs.486.7cr for the quarter (V/s an expected Rs.440cr), ie a yoy growth of 18.7%. The OPM stood at 16.2% (V/s an expected 15.1%), an expansion of 100bp yoy, in spite of the GPM dipping to 49.4% from 51.5% in the corresponding quarter of the previous year. This was on account of staff costs and other expenses rising only by 12.9% yoy and 5.2% yoy, respectively, for the quarter. The net profit came in at Rs.57.5cr (V/s an expected Rs.55.0cr), registering a yoy growth of 12.3%. We maintain our Neutral stance on the stock.

Better-than-expected results on all fronts: Sanofi India posted sales of Rs.486.7cr (V/s an expected Rs.440cr), ie a yoy growth of 18.7%. The OPM stood at 16.2% (V/s an expected 15.1%), an expansion of 100bp yoy, in spite of the GPM dipping to 49.4% from 51.5% in the corresponding quarter of the previous year. This was on account of staff costs and other expenses rising only by 12.9% yoy and 5.2% yoy, respectively, during the quarter. The net profit came in at Rs.57.5cr (V/s an expected Rs.55.0cr), registering a yoy growth of 12.3%.

Outlook and valuation: We expect net sales to post a CAGR of 10.6% to Rs.2,088cr and EPS to post a CAGR of 6.6% to Rs.122.3 over CY2013–15. At current levels, the stock is trading at 25.7x and 24.0x CY2014E and CY2015E earnings, respectively. We recommend a Neutral rating on the stock.

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