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Last Updated : Aug 18, 2012 02:04 PM IST | Source: Moneycontrol.com

Accumulate Pfizer; target of Rs 1265: Emkay

Emkay Global Financial Services is bullish on Pfizer and has recommended accumulate rating on the stock with a target of Rs 1265 in its August 16, 2012 research report.

 
 
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Emkay Global Financial Services is bullish on Pfizer and has recommended accumulate rating on the stock with a target of Rs 1265 in its August 16, 2012 research report.


“Pfizer Q1FY13 Results, below expectations - a) Revenue down 9% YoY to Rs2.2bn, b) EBIDTA down by 23% YoY to Rs323mn and c) APAT down by 12% YoY to Rs365mn. Poor performance was due to subdued growth in company’s top brands – Corex, Becosules, Gelusil & Dolonex. EBITDA margins contracted 273bps YoY to 13.3% even after hiving off animal biz which was a low gross margin biz. Going ahead, we expect top brands to continue to under perform which will put pressure on growth & margins. On back of lower growth in top brands and slower ramp-up in new launches, we downgrade the stock to Hold with a target price of Rs1265 (18x average of FY13/14E EPS of Rs70)”


“Branded formulations (contr 90%) grew at poor rate of 3% vs. industry rate of 14%. Company’s top brand-Gelusil, Becosules, Corex & Dolonex recorded subdued growth on account of slower growth in the super group therapy. Corex sales were affected due to regulatory issues in various states across the country. Company launched only 1 product this quarter in the calcium vitamin category. There were 26 new launches during FY12 of which 7 were in Q4FY12 in CNS, CVS and anti-infective segments EBITDA margins contracted 273bps to 13% due to poor domestic biz growth PAT after adjusting for one-time gain of Rs3.8bn realized from the sale of Animal Healthcare business declined 12% YoY to Rs365mn."


“Management is aiming at 14-16% growth in top-line with some improvement in margins. Pfizer is focusing on 20 new launches for FY13 in the branded generics space. This will be primarily in CVS, CNS & diabetics category. Company has added 500MRs in last one year which is primarily for chronic categories like CVS & CNS. Current filed force strength stands at 2600. We expect Pfizer to report 14% revenue CAGR (ex. Animal Healthcare biz) over FY12- 14E. EBITDA margins are expected to hover around 18% for FY13/14E. Earnings are expected to grow at a 10% CAGR over FY12-14E. Downgrade the stock to Hold with a target of Rs1265. At CMP, the stock is trading at 19x FY13E and 17x FY14E EPS,” says Emkay Global Financial Services research report.


Non-Institutions holding more than 90% in Indian cos 


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To read the full report click on the attachment

First Published on Aug 18, 2012 01:50 pm
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