reports
- Yusra Beg
The Searle Company: 2QFY23 Review - Faring better than peers
SEARL has announced 2QFY23 NPAT of PKR365mn (EPS: PKR0.93), down 31% YoY, but up 38% QoQ led by improved margins – a seasonal increase in our view. This takes 1HFY23 NPAT to PKR629mn (EPS: PKR1.61), down 56% YoY. Sharp earnings contraction is primarily led by (i) higher raw material and distribution costs and inability to pass on the same and (ii) higher finance costs. SEARL did not announce any dividends in line with expectations. 2QFY23 KEY RESULT HIGHLIGHTS: * SEARL has reported revenue o...
- Yusra Beg
Pakistan Pharmaceuticals: Some relief on the way
As per news sources, the Health Ministry and DRAP have forwarded a summary to the federal cabinet, seeking upto 350% increase in prices of 119 medicines. These includes drugs used in the treatment of typhoid, malaria, colds and other diseases. To recall, over 70 drug makers applied for an ad-hoc increase in drug prices to counter the impact of high inflation (7MFY23 average CPI: 25.4%) and sharp PKR devaluation (+50% since Jan’22). This will help address shortage of medicines in the country a...
The Searle Company Ltd: 1 director
A director at The Searle Company Ltd sold 200,000 shares at 83.690PKR and the significance rating of the trade was 52/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years...
- Yusra Beg
The Searle Company: 3QFY21 review: Sequential decline as margins come ...
SEARL has announced 3QFY21 NPAT of PKR664mn (EPS: PKR2.77), up 9% yoy but down a sharp 22% qoq, taking 9MFY21 NPAT to PKR2.2bn (EPS: PKR 8.98), up 25% yoy. While sales from OBS Pakistan seemingly remain on track, sequentially lower gross margins (44.9% vs. 47.6% in 2Q) dragged the bottom line, leading to an earnings miss vs. consensus estimates. SEARL has not announced any interim dividends as per expectation. Alongside results, SEARL has announced the registrations of two new USFDA verified ...
- Yusra Beg
The Searle Company: 2QFY21 – Strong revenue contribution from OBS lead...
SEARL announced 2QFY21 NPAT of PKR855mn (EPS: PKR4.03), up 51% yoy and 35%qoq, taking 1HFY21 NPAT to PKR1.5bn (EPS: PKR 7.02), up 34%yoy. The result beat our EPS estimate of PKR3.15, where the deviation stemmed from higher-than-expected revenues on amalgamation of OBS Pakistan, with GMs coming exactly in-line with our estimate of 47.6%. SEARL did not announce any interim dividend as per expectation. Alongside results SEARL has intimated plans for listing of its subsidiary – most likely Luna ...
- Yusra Beg
The Searle Company: 2QFY21 preview – Luna Pakistan to fully amalgamate...
The Searle Company will announce its half-yearly results tomorrow, where we estimate 2QFY21 NPAT to clock in at PKR670mn (EPS: PKR3.15), up 16%yoy and 5%qoq, taking 1HFY21 NPAT to PKR1.3bn (EPS: PKR 6.14), up 17%yoy. We expect OBS Pakistan to be fully incorporated in this quarter’s results. In addition, we expect Hospital Care division sales to maintain an upward momentum, which may offset any weakness in Mead Johnson portfolio. This, together with c. 4%qoq appreciation in the PKR is likely t...
- Yusra Beg
The Searle Company: FY20 Analyst Briefing Takeaways
SEARL held their Analyst Briefing call today in which they discussed the company's performance and the future outlook. To recall, SEARL posted 1QFY21 NPAT of PKR636mn (EPS: PKR2.99), up 16%yoy but lower 20%qoq. Consistent revenue growth alongside strong cost control (SG&A expenses down 7%yoy) smoothened SEARL's profitability compared to high volatility last year. Results were accompanied with a rights share issuance of 13% at a price of PKR170/right in order to fund acquisition of UDL Pharmac...
- Sunny Kummar
Topline Flash Note: The Searle Company (SEARL): Corporate Briefing Not...
The Searle Company (SEARL) is the second largest pharmaceutical company in Pakistan. It is No.1 in Cardiovascular, Pain Management, Gynae and Obs and Cough Suppressant segments. The company has 4 over Rs1bn and 7 over Rs500mn brands in its portfolio. There are over 650,000 prescriptions with SEARL products prescribed by doctors every day. The company is ranked second in terms of volume with a market share of 7.04% and fourth in terms of value with a market share of 5.79%. The company has 11%...
- Yusra Beg
The Searle Company: 1QFY21 Review: Stable growth trajectory
SEARL posted 1QFY21 NPAT of PKR636mn (EPS: PKR2.99), up 16%yoy but lower 20%qoq. Consistent revenue growth alongside strong cost control (SG&A expenses down 7%yoy) have smoothened SEARL’s profitability vs. volatility last year. Results were accompanied by a rights share issuance of 13% at a price of PKR170/right in order to fund the acquisition of UDL Pharma’s production facility at Port Qasim at a consideration of PKR230mn. UDL Pharma is owned by First UDL Modaraba. Contrary to consensus exp...
- Yusra Beg
The Searle Company: 4QFY20 review – better cost control leads to earni...
SEARL posted 4QFY20 NPAT of PKR791mn (EPS: PKR3.72), up 69%yoy and 30%qoq. This takes FY20 NPAT to PKR2.5bn (EPS: PKR11.77), up 12%yoy – an earnings beat vs. our estimated FY20 EPS of PKR11.02. This is primarily led by lower SG&A expenses (down 19%yoy in 4Q). Results were accompanied with a final cash dividend of PKR2.50 (FY20 payout: 21%). Contrary to consensus expectations, SEARL did not announce any bonus issue. 4QFY20 RESULT HIGHLIGHTS Revenue of PKR5.4bn in 4QFY20 (up 15%yoy, 3%qoq) came...
- Yusra Beg
The Searle Company: Pakistan pharmaceuticals: Government takes away dr...
The government has reportedly decided to take away the pricing power from Pharmaceutical companies, effective July 2020. To this end, we understand the government will amend the Drug Pricing Policy 2018 and remove the clause allowing automatic pricing by pharmaceutical companies (under Paragraph 7). As a result, the government would effectively regain the power to determine prices of drugs. Previously, Pharmaceutical companies were authorized to raise drug prices inline with the annual CPI (o...
- Fawad Basir
The Searle Company (SEARL): Reinstating with a Buy
We reinstate our coverage on The Searle Company Limited (SEARL) with a ‘Buy’ stance. Our Target Price of Rs254, implies a total return of 26%. We believe the current COVID-19 pandemic bodes well for Pharmaceutical companies, with an expected increase in consumer and government spending towards healthcare and medical services. Four key earnings drivers for SEARL are: (i) Focus on market share on the back of both organic and inorganic growth: SEARL has a diversified portfolio of drugs in Paki...
- Yusra Beg
The Searle Company: Dexamethasone proves to be breakthrough drug for C...
A UK government-funded trial has immediately approved Dexamethasone, an anti-inflammatory drug (corticosteroid), to treat all hospitalised Covid-19 patients requiring oxygen, including those on ventilators. The drug has been proven to reduce the risk of death significantly among Covid-19 patients on ventilation by as much as c35% and patients on oxygen by c20%, hence reducing the total 28-days mortality rate by 17%. Dexamethasone has been used since the early 1960s to treat a wide range of co...
- Yusra Beg
SEARL enters exclusive license agreement with Beximco Pharma for Remde...
In an exchange filing today, SEARL PA has announced that it has successfully entered into a licensing and marketing agreement with Beximco Pharmaceuticals Bangladesh for Remdesivir – a US FDA approved wide-spectrum antiviral drug used to treat advanced stage Covid-19 patients. This partnership will provide an immediate supply of the finished product at an affordable price and without much delay in due process. Initially SEARL plans to import Remdesivir in its finished form (ready-to-use) to m....
- Yusra Beg
The Searle Company: Q3 FY 20 review: Better cost control leads to earn...
SEARL posted 3QFY20 NPAT of PKR610mn (EPS: PKR2.87), up 29%yoy and 8%qoq. This takes 9MFY20 NPAT to PKR1,722mn (EPS: PKR8.11), down 3%yoy. The result is better than our projected EPS of PKR2.54 led by (i) lower SG&A expenses and (ii) lower-than-expected finance costs. While sales are a high PKR5,214mn, margins have thinned sequentially, leading to an inline gross profit. SEARL has not announced dividends, which is in line with expectations. Key highlights: * Revenue of PKR5,214mn in 3QFY20 (...
- Yusra Beg
The Searle Company: 3QFY20 preview – Sequentially slightly lower ear...
SEARL is expected to post 3QFY20 NPAT of PKR539mn (EPS: PKR2.54), up 14%yoy but down 5% qoq due to seasonality. This is expected to take 9MFY20 NPAT to PKR1,652mn (EPS: PKR7.77), down 7%yoy. We do not expect SEARL to announce any dividend. It is pertinent to mention that the results may differ substantially if SEARL amalgamates Luna Pakistan into its consolidated accounts this quarter. In this event, we expect 3QFY20 consolidated revenue to climb to PKR9,425mn and NPAT to rise to PKR716mn (EP...
The Searle Company (SEARL): 1QFY19 EPS Rs3.2, -15% YoY (+91 % QoQ); (B...
SEARL announced consolidated earnings of Rs676mn (diluted EPS Rs3.2) down 15% YoY in 1QFY19, which fared better than our estimates, mainly due to better than anticipated margins. Net sales witnessed 10% YoY growth, mainly on the back of volumetric growth we believe. Gross margin decline was restricted to 90bps YoY to 48% in 1QFY19. This was contrary to our expectations as we were anticipating significant contraction in margins due to PKR weakness against the greenback. Gross margins were als...
The Searle Company (SEARL): 4QFY18 EPS Rs1.9 -41% YoY (-44% QoQ); DPS ...
SEARL announced consolidated earnings of Rs353mn (EPSRs1.9) down 41% YoY in 4QFY18, broadly in-line with our expectations. Lower earnings are attributed to lower GP margins of 42% (down 8ppts YoY) in 4QFY18 amidst rupee devaluation, we believe. Further, sharp increase in selling & distribution and finance cost by 49% and 306% YoY respectively weighed on earnings growth. The former was higher than sales growth due to higher travelling expenses amidst increasing fuel cost, while latter increase...
- Yusra Beg
Pakistan Pharmaceuticals: Impressive 1QCY18 performance; GMs key for 2...
1QCY18 earnings growth was robust (+12%YoY) for selected pharma cluster (GLAXO, ABOT, SEARL, HINOON & AGP), up 8%YoY when including FEROZ. Within our coverage, SEARL and AGP stood out as clear outperformers with 52%/18%YoY bottom-line growth for the period. Despite two rounds of PKR devaluations, full impact on imported APIs is yet to be felt, where 1QCY18 industry GMs (ex. FEROZ) inched up to 38% (1QCY17: 37%). We therefore anticipate devaluation impact to fully reflect in 2QCY18. Volumetric...
- Yusra Beg
Intermarket Perspective - Pharmaceutical Sector - Initiation of Covera...
We initiate coverage on the Pakistan Pharmaceutical sector with a Marketweight stance and a preference for local companies (SEARL: Neutral; AGP: Buy). Burgeoning demand in a 200mn+ population has led to a 12% 5yr sales CAGR and a US$3bn market size (c. 1% of GDP). We think growth momentum can increase, with push from annual price increases under the Drug Policy 2015. Further impetus can come from continued introduction of branded generics, diversification into nutritional segments, and US FD...
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