Sanofi India - 3QCY2015 Result Update - Angel Broking

Sanofi India (Sanofi)'s 3QCY2015 results have come in marginally higher than our expectation. The company posted a 13.4% yoy growth in revenues to Rs. 553cr V/s an expected Rs. 536cr. On the operating front, the gross margin came in at 52.0% V/s an expected 48.3% and V/s 48.2% in the corresponding period of last year. The OPM came in at 19.7% V/s an expected 17.8% and V/s 15.7% in the corresponding period of last year. Consequently, the PAT came in at Rs. 72.5cr (V/s an expected Rs. 70.0cr), a yoy growth of 16.9%. We recommend a Neutral rating on the stock.

Better-than-expected results, mainly on OPM front: The company posted a 13.4% yoy growth in revenues to Rs. 553cr V/s an expected Rs. 536cr. We expect revenue growth to sustain in the coming quarters with improvement in volumes along with likely price hikes in DPCO products. On the operating front, the gross margin came in at 52.0% V/s an expected 48.3% and V/s 48.2% in the corresponding period of last year. The OPM came in at 19.7% V/s an expected 17.8% and V/s 15.7% in the corresponding period of last year. Consequently, the PAT came in at Rs. 73cr (V/s an expected Rs. 70cr), a yoy growth of 16.9%. Tax as % of PBT was 40.7% V/s 34.0% in 3QCY2014. Other income for the quarter, at Rs. 42cr, was same as in the corresponding period of last year.

Outlook and valuation: We expect net sales to post a 10.5% CAGR to Rs. 2,371cr and EPS to register a 33.1% CAGR to Rs. 151.5 over CY2014-16. At current levels, the stock is trading at 36.0x and 28.1x its CY2015E and CY2016E earnings, respectively. Given the rich valuations, we recommend a Neutral rating on the stock.

Shares of Sanofi India Ltd was last trading in BSE at Rs.4546.8 as compared to the previous close of Rs. 4480.75. The total number of shares traded during the day was 2528 in over 544 trades.

The stock hit an intraday high of Rs. 4600 and intraday low of 4403.45. The net turnover during the day was Rs. 11438301.

Source : Equity Bulls

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