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Reduce Cipla; target of Rs 283: Emkay
Emkay Global Financial Services is bearish on Cipla and has recommended reduce rating on the stock with a target of Rs 283 in its August 6, 2011 research report.
Emkay Global Financial Services is bearish on Cipla and has recommended reduce rating on the stock with a target of Rs 283 in its August 6, 2011 research report.
"Cipla's Q1FY12 results were below expectation with a) Revenues up 9% to Rs15.5bn b) EBITDA up 2% to Rs3.6bn and c) APAT down 11% to Rs2.4bn. Subdued growth in revenues was mainly due to 8% growth in Exports which was led by 22% growth in API sales. Domestic business grew below industry rate at 10%. Acute segment witnessed intense competition from industry peers during the quarter. Respiratory segment continues to do well for the company."
"We expect Cipla to report 13% revenue growth in FY12 and 16% in FY13. We expect company's base EBITDA margins to improve from 21.2% in FY11 to 21.9% in FY12 and 22.8% in FY13 as utilization of recently created manufacturing capacities increases. With consistent decline in performance over the last 5 quarters and low visibility of growth going forward, we value the company at 16XFY13 EPS to arrive at a target price of Rs 283 and maintain the reduce rating. At CMP, the stock is trading at 23X of FY12E and 18X of FY13E," says Emkay Global Financial Services research report.
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