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M a r g i n s t o im p r o v e , g o i n g a h e a d … .
Ipca’s Q1FY12 results were above our expectations. Revenues grew
26.8% YoY to | 529.9 crore, above our expectation of | 480 crore mainly
driven by the export formulation business. The total export formulation
business increased by 69% to | 206.6 crore driven by higher sales from
the institutional business. With the increase in proposition of formulation
to total revenues, EBITDA margins improved by 120 bps to 18.0%.
Growth in the operational performance coupled with forex gains of | 9.1
crore pushed net profit growth to 58.8% at | 61.7 crore. We have
upgraded the stock from HOLD to BUY on account of greater visibility.
ƒ Domestic formulation business grows 12% YoY
The domestic formulation business grew 12% YoY to | 188.9 crore
is spite of de-growth in antibiotic segment and marginal growth in
the cardiac business. Antibiotics witnessed decline of 13% YoY as
the segment faced higher attrition among MRs. Other therapies like
pain, anti malarial and cough & cold have grown by 23%, 28% and
57%, respectively. It launched two products during the quarter and
expects to launch 6-7 products in the domestic market.
ƒ To clock | 200 crore from institutional generic business in FY12
The company expects to clock | 180-200 crore in the current fiscal
from the institutional generic business. Currently, Ipca is supplying
Artemether and Lumefantrine tablets (anti malarial) in African
countries under the supply arrangement with NFM. During the
quarter, the company clocked institutional sales of | 53.3 crore as
against | 4.4 crore in the corresponding previous period.
V a l u a t i o n
With the approval for Indore facility on cards, formulation exports
are expected to be in a high growth territory for a sizable future.
Domestic formulations are also expected to be better on account of
focus on chronic therapies and expertise in anti-malarials. A strong
balance sheet and transparent management are some other
strongholds of the company. We expect sales and PAT to grow at a
CAGR of 17% and 21% between FY11 and FY13E. We have valued
the stock at 12x FY13E EPS of | 30.5.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
M a r g i n s t o im p r o v e , g o i n g a h e a d … .
Ipca’s Q1FY12 results were above our expectations. Revenues grew
26.8% YoY to | 529.9 crore, above our expectation of | 480 crore mainly
driven by the export formulation business. The total export formulation
business increased by 69% to | 206.6 crore driven by higher sales from
the institutional business. With the increase in proposition of formulation
to total revenues, EBITDA margins improved by 120 bps to 18.0%.
Growth in the operational performance coupled with forex gains of | 9.1
crore pushed net profit growth to 58.8% at | 61.7 crore. We have
upgraded the stock from HOLD to BUY on account of greater visibility.
ƒ Domestic formulation business grows 12% YoY
The domestic formulation business grew 12% YoY to | 188.9 crore
is spite of de-growth in antibiotic segment and marginal growth in
the cardiac business. Antibiotics witnessed decline of 13% YoY as
the segment faced higher attrition among MRs. Other therapies like
pain, anti malarial and cough & cold have grown by 23%, 28% and
57%, respectively. It launched two products during the quarter and
expects to launch 6-7 products in the domestic market.
ƒ To clock | 200 crore from institutional generic business in FY12
The company expects to clock | 180-200 crore in the current fiscal
from the institutional generic business. Currently, Ipca is supplying
Artemether and Lumefantrine tablets (anti malarial) in African
countries under the supply arrangement with NFM. During the
quarter, the company clocked institutional sales of | 53.3 crore as
against | 4.4 crore in the corresponding previous period.
V a l u a t i o n
With the approval for Indore facility on cards, formulation exports
are expected to be in a high growth territory for a sizable future.
Domestic formulations are also expected to be better on account of
focus on chronic therapies and expertise in anti-malarials. A strong
balance sheet and transparent management are some other
strongholds of the company. We expect sales and PAT to grow at a
CAGR of 17% and 21% between FY11 and FY13E. We have valued
the stock at 12x FY13E EPS of | 30.5.
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