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Sanofi India 3QCY2012 performance highlights and results update

Contributed by Angel Broking

For 3QCY2012, Sanofi India (Sanofi) reported in-line results at the top-line and the net profit fronts. Sales grew by 26.8% yoy, while the net profit declined by 6.5% yoy mainly on the back of higher deprecation. Given the valuations, we recommend a Neutral view on the stock.

Results just in line with expectations: Sanofi’s net sales grew by 26.8% yoy to Rs.397cr for 3CY2012, in-line with our estimate of Rs.393cr. The company reported gross margin of 51.6% (48.6%), higher than our estimate of 50.7%. Consequently, the OPM came in at 20.3%, higher than our estimate of 16.7%. However, in spite of this, the net profit came in at Rs.51.3cr, down by 6.5% yoy, just- in-line with our estimate of Rs.51.9cr.

Outlook and valuation: We expect net sales to post a 17.0% CAGR to Rs.1,682cr and EPS to register a 12.0% CAGR to Rs.104.4 over CY2011–13E. At the current levels, the stock is trading at 23.3x and 21.2x CY2012E and CY2013E earnings, respectively. We recommend a Neutral view on the stock.