39525 Investors following Cipla. Share this News with them.
0
Like this story, share it with millions of investors on M3
Sell Cipla; target Rs 318: Emkay
Emkay Global Financial Services is bearish on Cipla and has recommended sell rating on the stock with a target price of Rs 318 in its February 13, 2012 research report.
Emkay Global Financial Services is bearish on Cipla and has recommended sell rating on the stock with a target price of Rs 318 in its February 13, 2012 research report.
"Cipla's Q3FY12 results were below expectation with a) Revenues up 14% to Rs17.1bn b) EBITDA up 23% to Rs3.9bn and c) APAT up 16% to Rs2.7bn. Revenues were driven by 18% growth in domestic biz. EBITDA margins declined 215bps QoQ despite strong growth in domestic biz and INR dep. Going forward with no favorable impact of currency, we believe gross margins will return to ~55% from current levels of 58%, thereby restricting EBITDA margins to 21-22%. On account of delay in Indore SEZ ramp-up and weakening in margins going ahead."
"We expect Cipla to report 14% revenue growth in FY12 and 16% in FY13. We expect company's base EBITDA margins to improve from 21.2% in FY11 to 21.5% in FY12 and 22.5% in FY13 as utilization of recently created manufacturing capacities increases. However, on account of low visibility of growth going forward, we value the company at 18XFY13 EPS to arrive at a target price of Rs 318 and downgrade the stock to Sell. At CMP, the stock is trading at 24X of FY12E and 19X of FY13E," says Emkay Global Financial Services 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.
