ICICI Direct's research report on Unichem Laboratories
Export formulations (28% of total revenues) have grown at 24% CAGR in FY12-16 on the back of significant investment in infrastructure to push exports. New product launches in US and a ramp-up in CRAMS for US, EU based customers have contributed to growth. CRAMS business, of late, has struggled though, with customers postponing or cancelling requirements. For the rest of exports, the company is looking for US generics traction.
Outlook
Export formulations are likely to maintain the growth tempo mainly on the back of incremental US launches. However, EBITDA margin constraints continue due to 1) manpower addition at Goa plant 2) increase in R&D 3) foray in domestic OTC and 4) high cost base in the US. We continue to monitor the margin scenario. We believe this could be the main trigger for valuation. Our new target price is Rs 285 (12x FY19E EPS of Rs 18.9). We maintain HOLD.
For all recommendations, click here 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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!