Buy Neuland Labs; target of Rs 1000: HDFC Securities

HDFC Securities is bullish on Neuland Labs has recommended buy rating on the stock with a target price of Rs 1000 in its research report dated May 12, 2018.

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May 21, 2018 / 17:58 IST

26 Aug, 2025 12:21

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HDFC Securities' research report on Neuland Labs

Ahead of expectations, Neuland Labs (NLL) ended the year with improved business performance. Top line grew 13.2% YoY/31.5% QoQ to Rs 1.6bn, with significant jump seen in Ciprofloxacin and Levetiracetam revenues during this quarter. EBITDA declined 34%YoY to Rs 188mn. However, sequential growth of 105% was encouraging. EBITDA margin stood at 11.7% (down 838bps YoY, up 420bps QoQ and 170bps ahead of expectation). Reported PAT after merging with NHSPL and NPRPL, came in at Rs 81mn in 4QFY18.

Outlook

This will largely be driven by returning volumes in the Niche API and CMS business segments, with all eyes on the launch of gAdvair in the US. Foresee 19% revenue CAGR, 820bps margin expansion and 5.5x earnings over FY18-20E (favorable base). At peak demand, API supply for Salmeterol, Deutetrabenazine and Trulance are likely to add Rs 43, Rs 18 and Rs 20 EPS respectively. Re-iterate BUY with a TP of Rs 1,000 (16x on FY20E EPS).For all recommendations report, click here

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