Unichem Labs In Restructuring Phase – Downgrade to Hold ::Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Unichem Labs

In Restructuring Phase – Downgrade to Hold

HOLD

CMP: Rs 161                                        Target Price: Rs 167

---

n     Unichem is restructuring its distribution model in domestic market and moving from distributors to C&F agents which will result in loss of one months domestic sales in FY12

n     Higher attrition rate & recruitment of new MR’s will take a toll on domestic business resulting in 8-10% growth in FY12

n     Outsourcing contract with MNC generic company will commence in H2FY12E; potential revenues of Rs600mn & Rs1.2bn in FY12/13E respectively

n     Inventory rationalization and addition of new MR’s will continue to pressurize margins, cut earnings by 17%/ 15% to Rs11.2/ Rs15.2 for FY12/FY13E; re-rate the stock to hold