Oct 31, 2011, 03.44 PM | Source: Moneycontrol.com
Angel Broking is bullish on Indoco Remedies and has recommended buy rating on the stock with a target of Rs 583 in its October 28, 2011 research report.
, Angel Broking |
“For 2QFY2012, Indoco Remedies (Indoco) declared in-line results at the revenue front, reporting growth of 9.4% yoy. However, on the net profit front, growth came in lower than expected, declining by 9.4% yoy. This was mainly on account of OPM declining by 95bp yoy to 12.4% (13.4%), lower than our estimates. The domestic formulation segment grew moderately by 5.3% yoy during the quarter, contributing 64.4% to the total revenue, whereas formulations exports increased by 23.6% yoy.”
“Indoco reported net sales of Rs 145cr (Rs 132cr), up 9.4% yoy, almost in-line with our expectation of Rs 148cr for 2QFY2012, mainly on account of lower sales from the domestic high-margin formulations segment. Gross margin came in at 54.2%, in-line with 2QFY2011. OPM decreased by 95bp yoy to 12.4% (13.4%). Net profit for the quarter came in at Rs 13.8cr, 23.7% below our estimate of Rs 18.1cr.”
“We expect net sales to post a 19.6% CAGR to Rs 685cr and EPS to post a 15.6% CAGR to Rs 55.5 over FY2011-13E. At Rs 373, the stock is trading at 8.8x and 6.7x FY2012E and FY2013E earnings, respectively. We recommend Buy on the stock with a revised target price of Rs 583,” says Angel Broking research report.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
To read the full report click here