“For 4QFY2012, Indoco Remedies (Indoco) declared in-line results at the revenue front, reporting growth of 22.6% yoy. However, on the net profit front, growth came in lower than expected, growing by only 3.0% yoy. This was mainly on account of lower than expected other income. The domestic formulation segment grew by 13.4% yoy during the quarter, contributing 55.5% to the total revenue, whereas formulations exports increased by 49.0% yoy. We recommend Buy on the stock.”
“Indoco reported net sales of Rs148cr (Rs120cr), up 22.6% yoy, almost in-line with our expectation of Rs155cr for 4QFY2012. The growth for the quarter came in mainly on back of exports, which grew by 49.0% yoy. The domestic formulations, which accounted by 55.5%, grew by 13.4% yoy. Gross margin came in at 56.1%, in-line with expectations of 55.8%. Also, the OPM expanded by 170bp yoy to 14.6% (12.9%), just-in-line our estimates. Net profit for the quarter came in at Rs12.5cr, 21.9% below our estimate of Rs16cr.”
“We expect net sales to post a 22.3% CAGR to Rs837cr and EPS to post a 33.3% CAGR to Rs8.9 over FY2012-14E. At Rs54, the stock is trading at 7.0x and 5.9x FY2013E and FY2014E earnings, respectively. We recommend Buy on the stock with a revised target price of Rs82,” says Angel Broking research report.
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