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Feb 08, 2013, 07.31 PM IST | Source: Moneycontrol.com

Angel Broking neutral on Cipla

Angel Broking has maintained a neutral rating on Cipla in its February 06, 2013 research report. According to the research firm, for FY2014, the Management of the company has given a revenue growth guidance of around 14% while the EBITDA margin is estimated to be at around 22%.

Angel Broking has maintained a neutral rating on Cipla in its February 06, 2013 research report. According to the research firm, for FY2014, the Management of the company has given a revenue growth guidance of around 14% while the EBITDA margin is estimated to be at around 22%.

"Cipla's numbers have come in lower than expected on the bottom-line front, but in-line on the sales front (For 3QFY2013). The net sales and profits for the quarter came in at Rs 2,031cr and Rs 339cr, registering a growth of 18.7% yoy and 25.5% yoy respectively. However, the major positive highlight of the quarter is the improvement in the OPM, which expanded by 215bp yoy to 22.3% (vs 24.9% expected). For FY2014, the Management has given a revenue growth guidance of 15% yoy, while EBITDA margin is expected to be ~22%.

Results lower than expectations: For 3QFY2013, the company reported lower-than-expected numbers on the bottom-line front. The net sales and profits for the quarter came in at Rs 2,031cr and Rs 339cr, registering a growth of 18.7% yoy and 25.5% yoy respectively. On the profitability front, the gross margin and operating profit margin came in much lower than expectations, at 60.7% and 22.3% respectively. Consequently the net profit came in at Rs 339cr, ie lower than expected, mainly on account of the lower-than-expected OPM.

For FY2014, the Management has given a revenue growth guidance of around 14% while the EBITDA margin is estimated to be at around 22%. We expect the company's net sales to post a 14.0% CAGR to Rs 9,130cr and EPS to record a 23.2% CAGR to Rs 21.6 over FY201214E. We recommend a Neutral on the stock," says Angel Broking research report.

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