Cipla has posted a lower-than-expected set of numbers for 3QFY2016. Sales
came in at Rs3,027cr (V/s `3,367cr expected) V/s Rs2,625cr in 3QFY2015, a yoy
growth of 15.3%, mainly led by exports. On the operating front, the OPM came
in at 12.0% V/s 19.9% expected and V/s 15.7% in 3QFY2015. According to the
Management, the revenues took a 2.5% impact on account of change in
distribution policy and an ~0.7% impact on back of currency impact of ZAR.
Thus, the Adj. net profit came in at Rs343cr V/s Rs400cr expected and V/s Rs328cr
in 3QFY2015, registering a yoy growth of 4.7%. We maintain our Buy on the
stock with a price target of Rs605.
Results better than expectations on the OPM front: Sales for the quarter came in
at Rs3,027cr (V/s Rs3,367cr expected) V/s Rs2,625cr in 3QFY2015, a yoy growth of
15.3%, mainly led by exports. Domestic sales (Rs1,194cr) posted a dip of 0.4%,
while exports (Rs1,833cr) posted a yoy growth of 28.5%. On the operating front,
the OPM came in at 12.0% V/s 19.9% expected and V/s 15.7% in 3QFY2015.
The lower OPM yoy is owing to decline in the GPM which came in at 58.9% V/s
63.9% expected and V/s 62.3% in 3QFY2015. The R&D expenditure during the
quarter was 8% of sales compared to 6% of sales during the corresponding
period of last year. Thus, the Adj. net profit came in at Rs343cr V/s Rs400cr
expected and V/s Rs328cr in 3QFY2015, registering a yoy growth of 4.7%.
Outlook and valuation: We expect the company to post an 18.7% CAGR in net
sales to Rs16,447cr and EPS to record a 18.3% CAGR to Rs27.5 over FY2015–
17E. The growth in the top-line would be driven by domestic formulation sales
and exports. We maintain our buy recommendation on the stock.
Please Wait...
Please Wait...
Please Wait...
Please Wait...
Please Wait...
Please Wait...
Please Wait...
Please Wait...
Please Wait...
Please Wait...
Please Wait...
Please Wait...