Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| 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

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., 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. 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:

Gladiator Stocks - Minda Industries - ICICI Direct

Reliance Industries - Company Update - In fine fettle amidst global uncertainty - BUY

Sector Update - Sugar - ICICI Direct

Initiating Coverage - Hindustan Aeronautics Ltd - ICICI Direct

Rallis India - Company Update - Margin pressure likely to persist in near term..!! - Upgrade to 'BUY'

Indraprastha Gas - Q4FY22 Result Update - Impressive performance - BUY

KEC International - Annual Report Analysis - Healthy outlook across business segment - Accumulate

Westlife Development - Q4FY22 Result Update - Approaching the tipping point; Buy for LT Gains

Reliance Research downgrades Bajaj Auto to Sell

NOCIL - Q4FY22 Result Update - Strong operating performance amidst challenges - BUY

Gujarat Gas - Company Update - Deftly negotiating through tough times - BUY

Orient Electric - Gaining market share via innovation: initiate with ADD - ICICI Securities

Manappuram Finance - Q4FY22 Result Update - Intense Competition Put Pressure on Yields - BUY

Derivatives Weekly View - June 24, 2022 - ICICI Direct

Stock Tales - Newgen Software - ICICI Direct

Weekly Report - June 25, 2022 - Mr. Mitul Shah - Head of Research at Reliance securities

Gladiator Stocks - Bosch - ICICI Direct

Management Meet Update - Sheela Foam - ICICI Direct

Gladiator Stocks - Mahindra & Mahindra - ICICI Direct

Banks - Modifications to PPI and its impact on cards - Negligible impact, if any, for stocks under coverage

LIC Housing Finance - Q4FY22 Result Update - Fixed rate liabilities could cushion NIM - BUY

Navneet Education - Q4FY22 Result Update - Growth levers in place - BUY

MPC Minutes: Jun-22: All eyes on inflation - Acuité Ratings

Nazara Technologies - Management Meet Update - Breaking through the ESports landscape - BUY

Sector update - Quick Service Restaurants - YES Securities

JK Lakshmi Cement - Q4FY22 Result Update - Strong performance; Valuations drive upgrade - Accumulate

Would it be wise to invest in a home early in your career?

Dr. Reddy's Laboratories - Analyst Meet Update - Multiple growth initiatives - BUY

Dhanuka Agritech - Management Meet Update - 1Q likely to be subdued; all hopes pinned on the monsoons - BUY

BUY Ipca Laboratories - Q4FY22 Result Update - Weak exports; gradual recovery

Acuité expects India's current account deficit to widen to more than USD 90 bn in FY23 - Acuité Macro Pulse

Inflationary concerns will continue to weigh on the pace of economic revival in FY23 - Acuité Macroeconomic Performance index

City Union Bank - Q4FY22 Result Update - Asset quality on the mend - BUY

Banks - BNPL - Early results are not that exciting as yet - Kotak

Acuité expects FY23 GDP growth estimate at 7.5% - Acuité Macro Pulse - Growth - May-22 Edition

Base factor pushes up IIP in Apr-22 to an 8-month high - Acuité Ratings

India Strategy & Q4FY22 Review - Long term growth prospects to overshadow near term uncertainties

India Equity Strategy - Quarterly flipbook: Q4FY22-Cost inflation driving downgrades

FMCG - D2C is here to stay; omni-channel the way forward - HDFC Securities

Automobile Sector - Monthly Quick View - May'22 - Steady Performance Improvement, backed by Gradual Rural Recovery

BFSI - New normal rate cycle; brace for transmission effects - HDFC Securities

SBI Cards and Payment Services - BUY - TP Rs. 1260 - YES SECURITIES

RBI frontloads rate hike amid increased inflationary headwinds - Acuité Ratings

Monetary Policy June 2022 - Axis MF Views

RBI Monetary Policy View - Mr. Dhiraj Relli, MD & CEO, HDFC Securities

Monetary Policy - entering the red zone - Anuj Puri, ANAROCK

Mr. Murali Ramakrishnan, MD &CEO, South Indian Bank on RBI Monetary Policy

Comments on RBI's MPC Policy Jun'22 - Acuité Ratings

Views on RBI Monetary Policy - June 2022

Bayer Cropscience - Q4FY22 Result Update - Healthy all round performance - BUY

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

disclaimer copyright © 2005 - 2020