Sanofi India Ltd. share price target

26 February 2019 4QCY18 revenue growth was muted (~8% YoY) due to a high base, with some support from Lantus (the largest brand) and the smaller brands (ranked 26-50). Gross margin shrank by ~200bp YoY (-140bp QoQ) to 57% due to increased RM cost. EBITDA margin contracted by ~110bp YoY to 18.9% (our est. 19.8%) due to higher employee cost (+60bp YoY to 14.2% of sales), partly offset by a decline in other expenses (-180bp YoY, 23.8%). Consequently, EBITDA improved ~2% 11%/16%/17% YoY to INR27.7b/INR6.2b/INR3.8b. Growth was largely driven by volumes. Growth in Chronic segment (contributed around half of sales) exceeded that in Acute segment. SANLs secondary sales grew 12% YoY ~28% of sales).

Revenues grew 14% YoY and 11% QoQ to | 684 crore in Q2CY18 mainly due to strong growth in power brands. EBITDA margins expanded 485 bps YoY, 228 bps QoQ, to 24% mainly due to better operating leverage. EBITDA increased 43% YoY, 22% QoQ to | 164.5 crore. Net profit increased 35% YoY, 21% QoQ to | 99.6 crore mainly due to a strong operational performance. On a half yearly basis, revenues grew 13% YoY to | 1301 crore. EBITDA margins expanded 421 bps YoY to 23%. Net...

Sanofi's Q2CY18 results were above our estimates. Though Sales were marginally above our estimates by 1.6% at Rs6.8bn EBITDA/PAT were above our estimates by 8.1%/9.3%, respectively. EBITDA margins increased 485 bps given better management of costs. Regulatory hurdles have been continuously impacting the revenues of the company. However, we expect growth in-line with the industry on the back of volume growth in its flagship brands and patent product launches from parent. We expect Sanofi's sales/EBITDA/net profit to grow at a CAGR of 11.3%/17.8%/19.4%, respectively, over CY17-19E. We maintain our ACCUMULATE rating on the stock with a...

1QCY18 revenue rose ~12% YoY to INR6.2b (~3.4% miss). Revenue growth adjusted for GST was higher at 16% YoY, partly due to a low base of last year. Gross margin improved ~300bp YoY to 57%, led by a better product mix. EBITDA grew robustly by ~32% YoY to INR1.3b (~3% miss), with the margin expanding ~340bp YoY to 21.8%. This, along with higher other income (by ~42% YoY), led to a significant increase in PAT by ~38% YoY to INR825m (4.4% miss).

TOUJEO SOLOSTAR (insulin glargine recombinant) is close to launch (prelaunch activity ongoing). It is an original research product of the company's R&D;, approved by USFDA. This product is supposed to the...

Revenues grew by 11%YoY: SIL's revenue grew 11%YoY to Rs6.70bn from Rs6.05bn due normalcy in the domestic market after GST implementation. The company's top 19 brands contributed ~73% to revenues. Nine of the 19 top brands surpassed the market growth rate of 7.8% in December'17. We expect these brands to drive the company's growth. SIL derives ~27% of its revenues from exports of APIs, formulations and insulin pens. Launch of new products and line extensions, volume growth of existing brands would drive future growth. EBIDTA margin improved by 200bps: SIL's EBIDTA margin improved by 200bps to...

Sanofi's (SANL) 4QCY17 revenue increased ~ 13% YoY to INR6.7b (~2.8%miss). Revenue growth adjusted for GST was 14%. EBITDA rose 25% YoY toINR1.3b (8.8% miss), with the margin expanding ~190bp YoY to 20%. SANL incurred one-time expense of INR162m for abundant precaution (related to legal case), adjusting for which margin would have been 22.5%. PAT increased 50% YoY to INR760m, led by healthy revenue growth and margin improvement. For CY17, sales, EBITDA and PAT stood at INR24.9b (+5.5%YoY), INR5.4b (+1.7% YoY) and INR3.3b (+9.8% YoY), respectively.

For 3QCY2017, Sanofi India posted results which were above expectations on all fronts. The sales came in at `627cr v/s. `590cr expected, registering a yoy growth of 5.0%. On the operating front, the EBITDA margin came in at 22.8% (15.7% expected) v/s. 17.6% in 3QCY2016. GPM (Gross Profit Margin) was better at 50.5% v/s. 48.3% in 3QCY2016,..

Revenue grew by 5%YoY: SIL's revenue grew 5%YoY to Rs6.67bn from Rs6.38bn and was impacted by uncertainties of GST launch. The company's top 18 brands contributed ~70% to revenues. Twelve of the 18 top brands surpassed the market growth rate of 2.8% in September'17. We expect these brands to drive the company's growth. SIL derives ~27% of its revenues from exports of APIs, formulations and insulin pens. Launch of new products and line extensions, volume growth of existing brands would drive future growth. EBIDTA margin improved by 460bps: SIL's EBIDTA margin improved by 460bps to...