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Last Updated : Jun 19, 2020 11:39 AM IST | Source: Moneycontrol.com

Buy Natco Pharma; target of Rs 740: ICICI Direct

ICICI Direct is bullish on Natco Pharma has recommended buy rating on the stock with a target price of Rs 740 in its research report dated June 19, 2020.

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ICICI Direct's research report on Natco Pharma


Q4FY20 revenues remained flat at Rs 455 crore. Export formulations de-grew 13.3% YoY to Rs 219 crore due to supply chain issues amid Covid-19. Domestic formulations de-grew 44.8% YoY to Rs 103 crore due to decline in Hepatitis-C and oncology segment on account of pricing pressure. API segment grew 38% YoY to Rs 96.4 crore. EBITDA margins declined 433 bps YoY to 28.2% mainly due to change in product mix and lower realisation in the domestic oncology portfolio. EBITDA de-grew 13.5% YoY to Rs 128.3 crore. Net profit de-grew 22.1% YoY to Rs 94.1 crore.



Outlook


The growth trajectory is likely to improve from FY22 onwards as the new strategy settles down. We ascribe a target price of Rs 740, which includes base business value of ~Rs 448 (20x FY22E EPS of Rs 22.4) + Rs 292 for NPV of FTF/Para IVs in the US.


For all recommendations report, click here

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First Published on Jun 19, 2020 11:39 am
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