Dishman Carbogen Amcis' Q1FY19 results (Outperformer) - Steady quarter
Q1FY19 result highlights
- Net revenues were up 42%/7% yoy/qoq to Rs4.8bn, above our estimates of Rs4.1bn led by higher CRAMS revenues at Rs3.4bn (+37% yoy; flat qoq) and others at 1.1bn (+22% yoy; -3%qoq).
- Other operating income stood significantly higher at Rs3.3bn (includes realised forex gains of Rs278.4mn) vs loss of 11mn in Q4FY18 and Rs11.8mn in Q1FY18. Mgt guided that based on their current hedge positions, they expect significant forex gains to sustain through FY19.
- Led by higher revenues, reported EBITDA stood higher at Rs1.2bn (25%) vs our est of Rs1.07bn (26.1% margins). EBITDA was flat qoq
- Depreciation came in higher at Rs541mn (+5%/7% yoy/qoq) vs est of Rs525mn; other income was lower at Rs61mn vs Rs155mn in Q4 and our est of Rs150mn
- PBT of Rs581mn came in line with our est of Rs575mn. Reported PAT stood at Rs396mn (-22% qoq) inline with our est
Key positives: Higher revenues and other operating income
Key negatives: Lower GMs, higher costs and depreciation
Impact on financials: We have maintained our FY19/20 estimates.
Valuations & view
After establishing a strong core profitability base (640bps EBITDA margin expansion over FY15-FY18), Dishman is now aiming to step up revenue growth momentum also in coming years. Dishman has 15-16 projects which are close to commercialization with another 16-20 candidates in early Phase III across Carbogen and Indian facilities. This makes it one of the stronger pipelines amongst peers with the company hopeful of 2-3 new drugs getting commercialized every year. This high potential CRAMS pipeline coupled with low current profit base (FY18 CRAMS business EBITDA of ~$50m) can lead to sustained and meaningful profit growth over the medium term. Maintain Outperformer, with a target price of Rs376 (12x FY20E EBITDA).
Dishman Carbogen Amicis Limited is an India-based contract research and manufacturing services (CRAMS) company. The Company is engaged in the process of research and development to late-stage clinical and commercial manufacturing. It operates through two segments: CRAMS and Others. The CRAMS segment is its contract research and manufacturing segment under the long-term supply agreements. The others segment is focused on bulk drugs, intermediates, quaternary ammonium compounds (Quats) and specialty chemicals and outsourced/traded goods. It manufactures phase transfer catalysts, intermediates, fine chemicals, and various products for pharmaceutical, cosmetic and related industries. It also manufactures and supplies a range of Vitamin D and Vitamin D analogues. It also manufactures cholesterol and lanolin related products for pharmaceutical, cosmetic and related markets. The Company operates through nine manufacturing sites in Europe, India, China and Saudi Arabia.
IDFC Securities Ltd., a subsidiary of the Infrastructure Development Finance Company (IDFC) wherein the Government of India holds a 20% interest, is India's leading equities broker catering to most of the prominent financial institutions, both foreign and domestic investing in Indian equities. A research team of experienced and dedicated experts ensures the flow of critically investigated stock ideas and portfolio strategies for our clients. Our coverage spans across various growth sectors such as agriculture, automobiles, Consumer Goods, Technology, Healthcare, Infrastructure, Media, Power, Real Estate, Telecom, Capital Goods, Logistics, Cement amongst other sectors. Our clients value us for our strong research-led investment ideas, superior client servicing track record and exceptional execution skills.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.