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Results above expectations
Ajanta Pharma reported better than expected results for Q3FY12. Sales grew by
21.3% qoq and 36% yoy at Rs 163.9 cr. EBITDA margin has improved by 340 bps
qoq and 170 bps yoy at 20.6%. PAT margins have also improved by 250 bps qoq
and 140 bps yoy at 11.3%.
Key Highlights
Q3FY12 result includes Rs 6 cr forex loss because of MTM adjustment. This
has been included in other expenses. The company got the benefit of
exchange fluctuation to the tune of Rs 4.5 cr in sales.
EBITDA margin has improved to 20.6% during the quarter, which is purely
on operational efficiency. Management has indicated that these levels are
sustainable and expects margin to inch up further in Q4FY12.
Tax rate has increased during the quarter to 17.7%. It is expected to go
further up in Q4FY12 due to full utilization of past carry forward losses. For
full year we have assumed tax rate of 14% and 22% for FY13
The company is expected to start sales from two approved ANDAs by
Q1FY13. During the quarter, the company has filed two more ANDAs and
expects to file another three in Q4FY12 taking the total number of filings to
10. The company is steadily building its ANDAs portfolio in US, which would
ensure sustained growth in the coming years.
Valuation & Recommendation
With base business growing at decent 20% CAGR and new businesses like US
are adding, we remain positive on the future prospects of the company.
We are rolling our target price to FY13E. We recommend “BUY” on Ajanta
Pharma Limited with a target price of Rs. 409 (earlier was Rs 385) indicating a
potential upside of 18% from current levels. We also recommend investors to
accumulate the stock on declines
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Results above expectations
Ajanta Pharma reported better than expected results for Q3FY12. Sales grew by
21.3% qoq and 36% yoy at Rs 163.9 cr. EBITDA margin has improved by 340 bps
qoq and 170 bps yoy at 20.6%. PAT margins have also improved by 250 bps qoq
and 140 bps yoy at 11.3%.
Key Highlights
Q3FY12 result includes Rs 6 cr forex loss because of MTM adjustment. This
has been included in other expenses. The company got the benefit of
exchange fluctuation to the tune of Rs 4.5 cr in sales.
EBITDA margin has improved to 20.6% during the quarter, which is purely
on operational efficiency. Management has indicated that these levels are
sustainable and expects margin to inch up further in Q4FY12.
Tax rate has increased during the quarter to 17.7%. It is expected to go
further up in Q4FY12 due to full utilization of past carry forward losses. For
full year we have assumed tax rate of 14% and 22% for FY13
The company is expected to start sales from two approved ANDAs by
Q1FY13. During the quarter, the company has filed two more ANDAs and
expects to file another three in Q4FY12 taking the total number of filings to
10. The company is steadily building its ANDAs portfolio in US, which would
ensure sustained growth in the coming years.
Valuation & Recommendation
With base business growing at decent 20% CAGR and new businesses like US
are adding, we remain positive on the future prospects of the company.
We are rolling our target price to FY13E. We recommend “BUY” on Ajanta
Pharma Limited with a target price of Rs. 409 (earlier was Rs 385) indicating a
potential upside of 18% from current levels. We also recommend investors to
accumulate the stock on declines
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