Shilpa Medicare Ltd. share price target and research reports

Name: Latest research reports of Shilpa Medicare Ltd. authored by ICICI Securities Limited and published by - Trendlyne research reports.
Item: Shilpa Medicare Ltd.
Rating: 3
Author: ICICI Securities Limited

Latest analyst research reports with target prices and PDF download for SHILPAMED, BSE:530549 Shilpa Medicare Ltd.

Search Inside the pdf :

Shilpa Medicare Ltd.

15 Nov 2022

357.50

-2.64%

Margin woes continue

Hold: Shilpa Medicare Ltd.

Recommendation Target

ICICI Securities Limited

Shilpa Medicare’s (Shilpa) Q2FY23 performance was a big miss on profitability front.
Revenue declined 11.0% YoY to Rs2.6bn (I-Sec: Rs2.6bn) due to decline in sales in formulation segments. EBITDA margin at 4.9% (I-Sec: 12.0%) contracted 1,340bps YoY and 320bps QoQ.

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

25 Aug 2022

357.50

-2.64%

Analyst call highlights

Sell: Shilpa Medicare Ltd.

ICICI Securities Limited

Gross margins declined in Q1FY23 due to pricing pressures in both API and formulation
segments.

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

15 Aug 2022

357.50

-2.64%

Weak performance dents margins

Sell: Shilpa Medicare Ltd.

ICICI Securities Limited

Shilpa Medicare’s (Shilpa) Q1FY23 performance was weak across parameters.

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

11 Apr 2022

357.50

-2.64%

Shilpa Medicare - Proven capabilities, awaiting execution

Buy: Shilpa Medicare Ltd.

Monarch Networth Capital Limited

Shilpa Medicare Limited (SML') is a dominant player in Oncology (76% of total revenues). After establishing strong foothold in API segment, it leveraged its niche capabilities to forward integrate into formulations FY17 onwards. SML's strength lies in its R&D capabilities (~16% of sales) to move across value chain from APIs to formulations to Biologics, focusing on niche and complex molecules. Over last 5 years SML has been in a capex cycle (spent INR 1700crs+ on Capex and R&D) to augment its capabilities. At the same time earnings were impacted due to the Import Alert on the only USFDA plant. This led to a stretched balance sheet and an unsupportive P&L for SML over last 2 years. As per us, SML's earnings have now bottomed and should move north from here on the back of positive EBITDA contributions from Formulations and Biologics. Recombinant Albumin, large potential molecules and monetization of API business remain high probability optionality for SML. We thus value SML on 15x EV/EBITDA basis for their base business FY24E EBITDA and the valuations of key optionality as articulated in page 16 of the report. We thus arrive at a March-23 base...

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

07 Feb 2019

357.50

-2.64%

Op. leverage yet to kick in; faster approvals/launches crucial for growth

Buy: Shilpa Medicare Ltd.

Target

Motilal Oswal

7 February 2019 Revenue declined 7% YoY (+7% QoQ) momentum in US business, where sales grew 46% YoY to INR365m (21% of sales). This, however, was offset by the subdued performance of CRAMS business, where sales declined by 48% YoY to INR260m (15% of sales), particularly due to the exit from CRAMS JV. Captive consumption led to a 13% YoY decline in onco API sales to INR610m (35% of sales). Gross margin expanded by ~1,111bp YoY to 62%, led by the increased share of formulation sales. However, EBITDA margin expanded by only 40bp YoY to 15.1% due to increased operating cost (employee expenses up 558bp YoY and other expenses up 507bp YoY). Thus, absolute EBITDA declined by 4% margin shrank 804bp YoY due to increased RM cost. Adjusting for the same, PAT was up 20% YoY at INR5.3b (-4.3%/INR1.2b (unchanged)/INR739m (+2% YoY).

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

19 Jan 2019

357.50

-2.64%

US generics the key growth driver for SLPA over medium term

Buy: Shilpa Medicare Ltd.

Target

Motilal Oswal

Also, SLPA has regulatory compliance in place with respect to its formulation and API facility. The drug has a market size of USD885m (IQVIA MAT Q2 2018) with six other generic approvals, of which two approvals came in the last six months. For FY18, US sales stood at ~INR1.4b (USD20m; 19% of total sales), which came in largely from only two products (Capecitabine and Azacitidine). Thus, on FY18 base business of USD19m, g- Gleevec would contribute meaningfully in the US generic segment. Currently, SLPA has four ANDA approvals (including g-Gleevec) and a healthy pipeline of 34 products pending for approval. We expect US sales to reach INR3.2b in FY20 (32% of sales) on the back of new launches and better traction in approved molecules. facility located at Raichur received EIR for inspection, which was carried out in Jan18. The formulations facility at Jadcherla received EIR in Mar18 for inspection carried out in Dec17.

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

15 Nov 2018

357.50

-2.64%

Preparing to improve operating leverage; approvals remain key

Buy: Shilpa Medicare Ltd.

Target

Motilal Oswal

14 November 2018 Shilpa Medicares (SLPA) revenue declined sales; down 38% YoY to INR310m) and Onco API (31% of sales; down 38% YoY to INR510m) segments. However, higher sales in US formulations (22% of sales; up 44% YoY to INR360m) and Non-Oncology API (22% of sales; up 14% YoY to INR363m) provided some comfort. expanded by 1,355bp YoY, led by increased sales of higher-margin products. margin contracting 470bp YoY to 23.1% (in-line) due to increased employee cost (27.3% of sales v/s 17.4% in 2QFY18) and other expenses (21.7% v/s 13.4% in 2QFY18). The increase in these cost components can be attributed to higher operating cost related to the formulation business. SLPA had extraordinary income of INR261m on account of sale of stake in JV. Adj. PAT EBITDA and PAT stood at INR3.6b (-3.2% YoY), INR923m (flat YoY) and INR554m (-2.

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

28 May 2018

357.50

-2.64%

Base business remains healthy; ANDA approvals - key for overall growth

Buy: Shilpa Medicare Ltd.

Target

Motilal Oswal

28 May 2018 Net sales grew 3.8% YoY to INR2.3b (est. of INR2.1b) in 4QFY18, led by increased formulation sales. Gross margin shrank 500bp YoY to 54% due to increased RM prices in the CRAMS business. EBITDA margin, too, contracted 480bp YoY to 20.3% (est. This, along with higher depreciation and lower other income, led to a PAT decline of 23.5% YoY to INR304m (est. Sales were flat at INR7.9b, largely due to the transfer of the CRAMS business to a joint venture.

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

02 Apr 2018

357.50

-2.64%

Shilpa Medicare: Stake sale to mark end of JV with ICE

Buy: Shilpa Medicare Ltd.

Target

Motilal Oswal

Shilpa Medicare (SLPA) recently decided to end its joint venture (JV) with ICE S.P.A Italy (ICE) - a move that would help it garner proceeds of INR1.3b, as against its investment of INR800m toward the JV. Furthermore, the amount of annual business with ICE via CRAMS may be reduced by ~INR500m. The decision was premised on the increasing uncertainty over the profitability of the JV. Accordingly, for FY19/FY20, we reduce our (i) sales estimate by 5% to INR10b/INR12b and (ii) earnings estimate by 8.5% to INR2.1b/INR2.7b. Consequently, our price target is lowered to INR686 (25x 12M forward earnings). We, however, remain positive on SLPA and re-iterate our Buy rating, given the promising outlook for the US formulations business (31 ANDAs pending for approval)and minimal medium-term regulatory risk.

Shilpa Medicare Ltd. is trading below all available SMAs

Shilpa Medicare Ltd.

27 Mar 2018

357.50

-2.64%

Shilpa Medicare Ltd.

Buy: Shilpa Medicare Ltd.

AUM Capital

Shilpa Medicare Ltd. (SML), established in 1987 at Raichur, Karnataka is engaged in the production and exports of consistently high-quality Active Pharmaceutical Ingredients (API) Fine Chemicals, intermediates, herbal products and speciality chemical products using sophisticated technology, meticulously following international specifications with Mr. Omprakash Inani as Chairman and Mr. Vishnukant C. Bhutada as MD. Over the period of time, it has shifted its focus towards creating a niche in pharmaceutical manufacturing particularly in Oncology generics. It is one of the leaders in the Oncology market and offers a complete range of products in this segment spanning across APIs, formulations both in terms of R&D; and manufacturing capabilities along...

Shilpa Medicare Ltd. is trading below all available SMAs

Is Shilpa Medicare Ltd. worth buying?

249 Votes:

Buy 79.12%

Sell 11.65%

Hold 9.24%