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Indoco
For 3QFY2011, Indoco Remedies (Indoco) reported net sales of `114.3cr (`95.7cr), lower
than our estimates of `121.7cr, mainly on account of lower sales in the domestic formulation
front, which grew only by 11.1% during the quarter. However, exports posted higher-thanexpected
growth of 35.0% during the period, led by strong growth in the regulated and
semi-regulated markets, which grew by 28.3% and 69.3%, respectively. Amongst the key
developments during the quarter, in the regulated market, Indoco signed a deal in the
derma space with US-based Zumanta. Also, during the quarter, Indoco signed new product
development deals with Aspen, extending its reach to Europe and Australia. On the
operating front, gross margin dropped to 55.4% (56.6%), majorly due to lower contribution
from the high-margin domestic formulation segment. The domestic formulation segment
contributed 64.7% to sales in 3QFY2011 vis-à-vis 69.6% in 3QFY2010. Consequently, OPM
for the quarter came in at 11.6% (12.9%). Overall, net profit increased by 14.1% to `8.8cr
(`7.7cr), lower than our estimate of `12.4cr. The stock is currently trading at 11.6x FY2011E
and 8.4x FY2012E earnings. We maintain our Accumulate rating on the stock with a Target
Price of `541.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Indoco
For 3QFY2011, Indoco Remedies (Indoco) reported net sales of `114.3cr (`95.7cr), lower
than our estimates of `121.7cr, mainly on account of lower sales in the domestic formulation
front, which grew only by 11.1% during the quarter. However, exports posted higher-thanexpected
growth of 35.0% during the period, led by strong growth in the regulated and
semi-regulated markets, which grew by 28.3% and 69.3%, respectively. Amongst the key
developments during the quarter, in the regulated market, Indoco signed a deal in the
derma space with US-based Zumanta. Also, during the quarter, Indoco signed new product
development deals with Aspen, extending its reach to Europe and Australia. On the
operating front, gross margin dropped to 55.4% (56.6%), majorly due to lower contribution
from the high-margin domestic formulation segment. The domestic formulation segment
contributed 64.7% to sales in 3QFY2011 vis-à-vis 69.6% in 3QFY2010. Consequently, OPM
for the quarter came in at 11.6% (12.9%). Overall, net profit increased by 14.1% to `8.8cr
(`7.7cr), lower than our estimate of `12.4cr. The stock is currently trading at 11.6x FY2011E
and 8.4x FY2012E earnings. We maintain our Accumulate rating on the stock with a Target
Price of `541.
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