Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Guidance: Topline growth of 15-17% (ex-Axicorp) and EBITDA margin of 30%
in FY12
The management has guided topline growth of 15-17% (Ex-Axicorp) and has re-iterated
its guidance of ~30% EBITDA margin for FY12. It estimates R&D expenditure at 8% of
revenue in FY12. The management has guided capex of INR1b-1.5b for FY12, which is
in addition to the USD160m capex planned over three years to service the Pfizer contract.
The company expects tax rate of 20-22% for FY12 against 16% in FY11, as some of its
tax covers have expired.
Expect strong growth in Insulin, partially led by Pfizer launching it in emerging
markets
The management has guided doubling of revenue from Insulin and Immunosuppressant
segments over the next three years, implying a CAGR of 26% over FY11-14. This will be
partially led by Pfizer launching human insulin in various emerging markets including
India in partnership with Biocon. The company expects the launch of Rh Human Insulin
in Europe in 2013. Currently, the drug is undergoing phase-III clinical trials. Biocon has
also indicated that it will shortly begin the development of Glargine.
Contract Research (CR) - improving profitability
Biocon's management expects profitability to improve in its CR business, led by the
change in its focus to deliver value-added integrated drug development (IDD) services
as against FTE-based services. The transition from FTE to IDD model had adversely
impacted its profitability in FY11. The management has guided 20% revenue growth for
the business in FY12 while it expects EBITDA margin at 30%+, as capacity utilization at
Syngene has improved.
Valuation and view
Key growth drivers for FY12/13 will be: (1) traction in the company's Insulin initiative
and Pfizer contract in emerging markets, (2) ramp-up in contract research business,
and (3) incremental contribution from immunosuppressant API supplies. Option values
for the future include separate listing of Syngene and potential out-licensing of the Oral
Insulin NCE. We estimate EPS at INR18.5 (up 6%) for FY12 and INR22.3 (up 20.8%) for
FY13. The stock currently trades at 17.8x FY12E and 14.7x FY13E EPS. Buy, with a
target price of INR402 (18x FY13E EPS).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Guidance: Topline growth of 15-17% (ex-Axicorp) and EBITDA margin of 30%
in FY12
The management has guided topline growth of 15-17% (Ex-Axicorp) and has re-iterated
its guidance of ~30% EBITDA margin for FY12. It estimates R&D expenditure at 8% of
revenue in FY12. The management has guided capex of INR1b-1.5b for FY12, which is
in addition to the USD160m capex planned over three years to service the Pfizer contract.
The company expects tax rate of 20-22% for FY12 against 16% in FY11, as some of its
tax covers have expired.
Expect strong growth in Insulin, partially led by Pfizer launching it in emerging
markets
The management has guided doubling of revenue from Insulin and Immunosuppressant
segments over the next three years, implying a CAGR of 26% over FY11-14. This will be
partially led by Pfizer launching human insulin in various emerging markets including
India in partnership with Biocon. The company expects the launch of Rh Human Insulin
in Europe in 2013. Currently, the drug is undergoing phase-III clinical trials. Biocon has
also indicated that it will shortly begin the development of Glargine.
Contract Research (CR) - improving profitability
Biocon's management expects profitability to improve in its CR business, led by the
change in its focus to deliver value-added integrated drug development (IDD) services
as against FTE-based services. The transition from FTE to IDD model had adversely
impacted its profitability in FY11. The management has guided 20% revenue growth for
the business in FY12 while it expects EBITDA margin at 30%+, as capacity utilization at
Syngene has improved.
Valuation and view
Key growth drivers for FY12/13 will be: (1) traction in the company's Insulin initiative
and Pfizer contract in emerging markets, (2) ramp-up in contract research business,
and (3) incremental contribution from immunosuppressant API supplies. Option values
for the future include separate listing of Syngene and potential out-licensing of the Oral
Insulin NCE. We estimate EPS at INR18.5 (up 6%) for FY12 and INR22.3 (up 20.8%) for
FY13. The stock currently trades at 17.8x FY12E and 14.7x FY13E EPS. Buy, with a
target price of INR402 (18x FY13E EPS).
No comments:
Post a Comment