Standalone revenues increased 12% YoY to | 1465 crore (I-direct estimate: | 1453 crore) on the back of a 22% increase in pharmacy business to | 633 crore (I-direct estimate: | 634 crore). Healthcare business grew 6% to | 833 crore (I-direct estimate: | 820 crore). EBITDA margins declined 85 bps to 12.8% (I-direct estimates: 13.6%) on the back of adverse product mix and Ind AS, which impacted EBITDA margins of healthcare services negatively by 130-140 bps. Adjusted net profit de-grew 18% to | 72 crore (I-direct estimate: | 93 crore) due to higher interest cost and lower EBITDA.

Valuation: On the pharmacy front, margins have showed a substantial improvement in the last few quarters. They continue to value the stock on an SOTP basis by valuing the healthcare business at 15x FY19E EV/EBITDA and pharmacy business at 1.5x FY19E EV/sales. They arrive at the target price of | 1460, will continue to monitor the progress on the margins as well as return ratios front.