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Ajanta Pharma Limited (APL) reported results better than our
expectations
Stellar Performance: During the year, the company reported
highest sales growth of 23.8% in net sales in last six years at Rs
504.9 cr. It was 5% higher than our expectation also. PAT grew by
49.1% to Rs 50.7 cr as against our expectation of Rs 44.2 cr. PAT
margins have improved 170 bps in FY11.
Key highlights
Ajanta Pharma has recently sold its two decades old brand
“30 plus” to Dabur for an undisclosed amount. It was an OTC
product with zero contribution to Ajanta’s revenues. Hence,
it will not affect our financial projections. We believe APL
would utilize the money to reduce its debt further.
EBITDA margins have improved from 18.9% in Fy10 to 19.1%
in FY11 against our expectation of flat performance.
Interest cost has declined during the year from Rs 20.2 cr in
FY10 to Rs 17.8 cr in FY11. As a result PAT growth was much
higher than sales and EBITDA growth.
In FY11, effective tax rate has also reduced to 10.3% from
12.3% in FY10, giving another push to the bottom-line.
PAT has increased by 49.1% in FY11 at Rs 50.7 cr.
PAT margins have also improved to record high at 10% in
FY11 from 8.3% in FY10.
Valuation & Recommendations
We have recommended Ajanta Pharma on 8th April 2011 in our
Initiating Coverage report at Rs 209. In less than a month, the
stock has given 24.4% returns. The stellar performance has
reiterated our belief in the company. Hence, we have revised our
numbers upwards.
We recommend “BUY” on Ajanta Pharma Limited with a target
price of Rs. 318 indicating a potential upside of 22.3%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ajanta Pharma Limited (APL) reported results better than our
expectations
Stellar Performance: During the year, the company reported
highest sales growth of 23.8% in net sales in last six years at Rs
504.9 cr. It was 5% higher than our expectation also. PAT grew by
49.1% to Rs 50.7 cr as against our expectation of Rs 44.2 cr. PAT
margins have improved 170 bps in FY11.
Key highlights
Ajanta Pharma has recently sold its two decades old brand
“30 plus” to Dabur for an undisclosed amount. It was an OTC
product with zero contribution to Ajanta’s revenues. Hence,
it will not affect our financial projections. We believe APL
would utilize the money to reduce its debt further.
EBITDA margins have improved from 18.9% in Fy10 to 19.1%
in FY11 against our expectation of flat performance.
Interest cost has declined during the year from Rs 20.2 cr in
FY10 to Rs 17.8 cr in FY11. As a result PAT growth was much
higher than sales and EBITDA growth.
In FY11, effective tax rate has also reduced to 10.3% from
12.3% in FY10, giving another push to the bottom-line.
PAT has increased by 49.1% in FY11 at Rs 50.7 cr.
PAT margins have also improved to record high at 10% in
FY11 from 8.3% in FY10.
Valuation & Recommendations
We have recommended Ajanta Pharma on 8th April 2011 in our
Initiating Coverage report at Rs 209. In less than a month, the
stock has given 24.4% returns. The stellar performance has
reiterated our belief in the company. Hence, we have revised our
numbers upwards.
We recommend “BUY” on Ajanta Pharma Limited with a target
price of Rs. 318 indicating a potential upside of 22.3%.
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