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Feb 15, 2012, 04.17 PM IST
CRISIL Research has come out with its report on Panacea Biotec. The research firm has maintained the fundamental grade of 3/5 to the company in its February 13, 2012 report.
CRISIL Research has come out with its report on Panacea Biotec . The research firm has maintained the fundamental grade of 3/5 to the company in its February 13, 2012 report.
Panacea Biotec Ltd’s (Panacea’s) Q3FY12 results were significantly below CRISIL Research’s expectations. Revenue declined 47% y-o-y to Rs 1,552 mn, and the company reported a loss of Rs 288 mn and Rs 717 mn at the EBITDA and PAT levels respectively. The decline was largely from loss in sale of pentavalent vaccine EasyFive due to its delisting by WHO and lower polio vaccine sales. We believe these headwinds are short term since the delisting is not because of product quality but due to non-compliance of quality management processes. The company is taking corrective action to upgrade its processes and we expect pentavalent sales to WHO to be resumed in FY13. We will provide more visibility on the same post our interaction with the management. While we maintain our fundamental grade of 3/5, we may revise our estimates downwards.
Q3FY12 result analysis
• EBITDA margin declined q-o-q to negative 18.6% from 0.9% in Q2FY11. We believe that it was because of: 1) loss in sale of significantly highmargin pentavalent vaccine EasyFive in Q3FY12, 2) the company was earlier planning to clear EasyFive inventory. We believe that the company would have cleared the inventory but at low realisations, hurting margins. However, we may provide more clarity on the same post our interaction with the management.
• The company reported loss of Rs 717 mn in Q3FY12 primarily due to lower operating margins and foreign exchange loss of Rs 108 mn.
Valuation: Current market price has upside
Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report. The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.
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