Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Indoco Remedies - Q4FY22 Result Update - In-line quarter; strong revenue guidance for US & EU mkt - Upgrade to 'BUY'

Posted On: 2022-06-29 22:24:49 (Time Zone: IST)


Mr. Param Desai - Research Analyst at Prabhudas Lilladher Pvt. Ltd.

Quick Pointers:

- Guided for 40% and 20% revenue growth in US and EU in FY23.

- Input cost to remain elevated in the near term.

Indoco Remedies' (INDR) reported robust performance in a regulated market; management expects to maintain its growth momentum given strong order book and new launches. Domestic market performed well on low base in therapies like anti-infective, Cardiac and Respiratory along with higher prescriptions. We remain structurally positive on INDR on account of 1) MR productivity enhancement and higher penetration in North and East markets 2) new launches in US and 3) higher tender business in EU market. Our FY23E and FY24E EPS stands reduced by 9% and 6% as we factor in lower margins. Given recent correction in stock price and current valuations of 14.8x P/E on FY24E are attractive, we upgrade stock to 'Buy' from Accumulate with TP of Rs430 based on 18x FY24E earnings.

Strong revenue across formulation segment: Consolidated revenues grew by 34% to Rs4.1bn vs our est of Rs3.93bn. Domestic formulations grew up 39% YoY to Rs 1.9bn higher than our estimate of Rs 1.8bn. Key therapeutic segments of INDR reported double digit growth YoY. Regulated business also grew strongly by 48% YoY to Rs1.6bn, in line with our estimate, aided by higher US sales (up 110% YoY and 42% QoQ). EM formulation grew by 29% YoY. API declined 34% YoY on account of increased captive consumption.

In-line EBIDTA; input cost pressure dragged margins: INDR registered EBITDA of Rs805mn, up 47% YoY, largely in line with our estimate. Reported OPM of 19.7%; down 83 bps QoQ. Adjusted for other operating income, margins were down 40 bps QoQ. Gross margins were down by 170bps QoQ and 300 bps YoY largely on pressure of input cost. Other expenses increased by 19% QoQ (21% YoY) largely on account of pick-up in business activities of regulated markets. R&D cost came in at 4.9% of sales; up 20% YoY. Resultant PAT grew by 62% YoY (up 23% QoQ) to Rs 405 mn, vs our est of Rs 382mn.

Key concall takeaways: (1) Strong order book across US & EU markets; Guided for revenue growth of 40% in US and 20% in EU in FY23. (2) Expect 5-6 approvals in opthal segment over next 2 years. This includes products like gCombigan expected to launch in Q2FY23. Company has got CRL which has been responded. Market size of the product is +USD400mn and likely to be second generic player. (3) Regulatory milestone in the US was Rs 180mn including profit share of Rs 40mn. (4) Domestic formulation included Rs300mn sales from COVID in FY22 and guided for +11-12% growth in FY23. New launches contributed 2% to total revs in FY22 which should further pick up in FY23. Consol price hike of +6% likely in FY23. Currently 11% of portfolio under NLEM. (5) Capex to tune of Rs 1.1bn-1.2bn in FY23 which includes Rs500-600mn of capex pertaining to opthal segment (6) API sales should normalize and grow 2x in FY23 (7) Input cost likely to stay elevated in near term and guided for ~ 69% GMs in FY23.

Shares of Indoco Remedies Limited was last trading in BSE at Rs. 370.75 as compared to the previous close of Rs. 372.30. The total number of shares traded during the day was 731 in over 144 trades.

The stock hit an intraday high of Rs. 375.25 and intraday low of 366.95. The net turnover during the day was Rs. 271406.00.


Click here to send ur comments or to feedback@equitybulls.com

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

CRISIL Ratings: Complex fertilisers volume to grow 4-5% next fiscal

Issuances of securitised debt instruments (SDI) by corporate entities to rise to Rs 100 crore in FY2024: ICRA

Godrej Interio's 'HomeScapes' Study reveals Indians want ‘Me-Time’ at home

GDP growth to moderate to 6.0% in Q3 FY2024, led by agriculture and industry: ICRA

Indian stock exchanges rank first in the world in terms of the number of IPOs in 2023

CRISIL Ratings: After soaring this fiscal, airlines to land >20% operating profit growth next fiscal

Rising frauds propel demand for AI/ML strategies: Experian Study

Cement makers to add 150-160 MTPA capacity by fiscal 2028 - CRISIL

Investor exuberance propelling broking industry performance, MTF achieves a new high: ICRA

CRISIL Ratings: Securitisation volume up ~20% in first nine months of this fiscal

India is fastest growing large economy globally in CY2023-CY 2024 - Pantomath Report

CRISIL Ratings: Market share of gold-loan NBFCs steady despite bank competition

CRISIL Ratings: Vehicle loan AUM to vroom past Rs 8 lakh crore next fiscal

45% of Newbie traders claim that 'not knowing enough' is the primary reason for losses incurred in Futures & Options trading - Sharekhan's survey reveals

CRISIL Ratings: Agri pump makers to see 7-9% revenue growth next fiscal

Indian mutual fund industry likely to sustain its strong inflows in 2024: ICRA Analytics

CRISIL Ratings: Operating profit of offshore rig operators to swell 30% next fiscal

CRISIL Ratings: Organised F&G retailer revenue to grow in mid-teens next fiscal

CRISIL Ratings: Shippers see a further revenue dip of 5-7% next fiscal as charter rates course correct

82% of professionals are concerned about job redundancy due to emerging technologies: Hero Vired Report

UPI transactions witnesses 118% rise at retail stores in 2023: PayNearby Report

Happy Forgings Limited - IPO - A trusted supplier for several Indian and Global OEMs - Reliance Securities

CRISIL Ratings: Penetration of electric buses set to double next fiscal

India's refined copper consumption to grow by 11% in FY2024, despite global headwinds: ICRA

CRISIL Market Intelligence and Analytics - Curb on cane juice for ethanol - Sugar output lift

Stable Repo Rates to Keep the Momentum Going for the Housing Market - Anuj Puri, Chairman - ANAROCK Group

Payback period for investment in sustainable warehouses come down to three years in India: A JLL - IndoSpace report

CRISIL Ratings - Profit margins of cotton yarn spinners to plunge 250-350 bps to decadal lows of 7-8% this fiscal

Government, PSUs, and Defence sector experience 14% upsurge in hiring: foundit Insights Tracker

CRISIL Ratings: Spirits high for organised liquor makers, revenues seen up 13%

Corporate bond market to more than double by fiscal 2030 - CRISIL

Gas Utilities : Gas consumption at record highs, growth now to trickle - Kotak Institutional Equities

Emkay and Geojit increase target prices of LIC, expect over 20% upside

CRISIL Ratings: Mall area to rise by 35% over the medium term on retail surge

Crop & Chemical Dashboard: Bottom is near, recovery unclear - Kotak Institutional Equities

Loan sell-downs of personal loan pools may see a temporary pause following the RBI's decision to increase risk weights: ICRA

India Surges Ahead in 5G Deployment, Paving the Way for a High-Tech Future!

CRISIL Ratings: Construction equipment revenue to grow 14-15% this fiscal

India to contribute 22% to the Global ER&D sourcing market by FY30: BCG-nasscom Report

CRISIL Ratings: In a decadal first, revenue of agrochemicals makers to slip ~3% on tepid demand this fiscal

CRISIL Ratings: Flexible packaging industry stares at decadal low profitability as oversupply stings

CRISIL Ratings: Domestic demand, softer cotton prices to sustain RMG growth

CRISIL Ratings: Higher workplace occupancy to light up cigarette volume 7-9%

CRISIL Ratings: Apparel retailers to grow 7-8% this fiscal via expansion, festival spur

CRISIL Ratings: For tea companies, ~8% revenue degrowth brewing this fiscal

CRISIL Ratings: Revenue of paper makers to crumple 8-10% this fiscal

ICRA expects banking sector to stay resilient, outlook remains Positive

CRISIL MI&A: Red-hot domestic demand to stave off steel price melt this fiscal

CRISIL Ratings: Replacement demand to drive tyre volume up 6-8% this fiscal

CRISIL Ratings: Home textiles makers to weave revenue, profitability rebound this fiscal


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020