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S t i l l n o t o u t o f t h e w o o d s …
Unichem Laboratories’ Q2FY12 numbers were inline with our
expectations. Revenues on a standalone basis declined by 2% YoY to |
198.8 crore inline with our expectation of |195 crore due to de-growth in
domestic formulation business. This was worse than our expectation
(3%) as key brands de-grew during the quarter. The fall in the domestic
formulation business was however compensated by strong growth in
exports, thanks to rupee depreciation. EBITDA margins declined by 920
bps to 14.3% YoY. Net profit declined by 45% to | 19.1 crore on the back
of higher interest and depreciation cost. As domestic business growth
remains a matter of concern, we have downgraded the stock from Buy to
Hold.
ƒ Plans to launch 2 products in the US market
So far Unichem launched 7 products in US market. It is planning to
launch 2 products in US market in the second half. Till date, the
company filed 21 ANDAs with USFDA and received approval for 9
ANDAs. It is planning to file 4 more ANDAs in the second half taking
total count to 25 ANDAs by the end of current fiscal.
ƒ Subsidiary continue to post loss
Niche Generics, the 100% UK Subsidiary recorded sales of £ 2.4
million and net loss of £ 0.29 million during the quarter. Unichem
Pharmaceuticals USA Inc., another 100% US Subsidiary recorded
sales of US$0.93 million and net loss of USD 0.27 million. We don’t
expect both these subsidiaries to turn around in the current fiscal.
V a l u a t i o n
We have reduced our FY12E and FY13E by | 3.2 and | 1.8 respectively
owing to recurring poor growth numbers in the domestic formulations.
Despite recent correction, we don’t see any reversal in the trend as the
corrective measures to improve the performance will take some more
time. Unichem is trading at 9.4x FY13E EPS of | 14. We have ascribed a
target of | 140, based on 10x FY13E EPS. We have reduced our rating
from BUY to HOLD.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S t i l l n o t o u t o f t h e w o o d s …
Unichem Laboratories’ Q2FY12 numbers were inline with our
expectations. Revenues on a standalone basis declined by 2% YoY to |
198.8 crore inline with our expectation of |195 crore due to de-growth in
domestic formulation business. This was worse than our expectation
(3%) as key brands de-grew during the quarter. The fall in the domestic
formulation business was however compensated by strong growth in
exports, thanks to rupee depreciation. EBITDA margins declined by 920
bps to 14.3% YoY. Net profit declined by 45% to | 19.1 crore on the back
of higher interest and depreciation cost. As domestic business growth
remains a matter of concern, we have downgraded the stock from Buy to
Hold.
ƒ Plans to launch 2 products in the US market
So far Unichem launched 7 products in US market. It is planning to
launch 2 products in US market in the second half. Till date, the
company filed 21 ANDAs with USFDA and received approval for 9
ANDAs. It is planning to file 4 more ANDAs in the second half taking
total count to 25 ANDAs by the end of current fiscal.
ƒ Subsidiary continue to post loss
Niche Generics, the 100% UK Subsidiary recorded sales of £ 2.4
million and net loss of £ 0.29 million during the quarter. Unichem
Pharmaceuticals USA Inc., another 100% US Subsidiary recorded
sales of US$0.93 million and net loss of USD 0.27 million. We don’t
expect both these subsidiaries to turn around in the current fiscal.
V a l u a t i o n
We have reduced our FY12E and FY13E by | 3.2 and | 1.8 respectively
owing to recurring poor growth numbers in the domestic formulations.
Despite recent correction, we don’t see any reversal in the trend as the
corrective measures to improve the performance will take some more
time. Unichem is trading at 9.4x FY13E EPS of | 14. We have ascribed a
target of | 140, based on 10x FY13E EPS. We have reduced our rating
from BUY to HOLD.
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