Motilal Oswal - Sanofi India (SANOFI) MOSL: SANOFI INDIA (Buy)-Revenue growth leads earnings for the quarter

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Motilal Oswal

MOSL: SANOFI INDIA (Buy)-Revenue growth leads earnings for the quarter

SANOFI INDIA: Revenue growth leads earnings for the quarter

(SANL IN, Mkt Cap USD1.8b, CMP INR5790, TP INR6850, 18% Upside, Buy)

Revenue in-line; superior margin leads better-than-expected earnings: Sanofi’s (SANL) 3QCY18 revenue increased ~11% YoY to INR7.4b (v/s est. of INR7.5b), on account of better traction in existing products. Gross margin during the quarter declined by ~430bp (-140bp QoQ) to 58% because of high base of past year. EBITDA margin contracted at lower rate of ~230bp YoY to 25.2% (our est. 23%) due to lower employee cost and other expenses (down ~40bp and ~150bp as percentage of sales). EBITDA saw marginal improvement by ~2% YoY to INR1.9b (v/s est. of INR1.7b), mainly led by revenue growth. PAT grew in line with EBITDA and stood at INR1.2b (v/s est. of INR1.1b) for the quarter.
Anti-diabetic drives overall performance: Growth for the quarter was largely driven by volume, new launches. Price hike supported growth to some extent. The chronic segment of the portfolio (~48% of total sales) grew better than the acute segment. Sanofi’s secondary sales increased marginally by 0.6%, as against 9.6% growth in IPM. Growth during the quarter was led by Anti-diabetic portfolio (~28% of sales), which is up 11.7% YoY. Lantus, its largest product grew by ~16% YoY during the quarter. The growth was offset to some extent by cardiac (15% of sales), vaccines (13% of sales), and respiratory (11% of sales) segment.

01/11/2018 8 EN

Underlying

Sanofi India

Sanofi India is engaged in the research, development, manufacture and production, of: (i) new and existing drugs, pharmaceuticals, haemaccel and biologicals; and, (ii) liquid injectibles, tablets, capsules, ointments, antibiotic powders, drops, syrups, Co.'s products include: Daonil, Avil, Soframycin, Combiflam, Tarivid, Streptase , Rifater and Rifadin INH, Rabipur, Claforan and Rulide (parenteral anti-infectives) Amaryl (oral anti-diabetic), Tavanic (anti-infective), Vaxcem Hib (Haemophilus Influenza type B (HIB) Vaccine), Morupar (measles, mumps, rubella (MMR) Vaccine), Insuman (human insulin) and Cardace-H.

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INE058A01010 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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MOSL: SANOFI INDIA (Buy)-Revenue growth leads earnings for the quarter

SANOFI INDIA increases its risk exposure and slightly lowers to Neutral

Event update: Sanofi India (Outperformer) - Strategic shift of global parent

Sanofi India's Q3CY19 results (Outperformer) - Below estimates

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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