Dear All,
Forwarding you the Result Update on Aventis Pharma for 1QCY2011 with a Neutral recommendation.
For 1QCY2011, Aventis Pharma (Aventis) reported in-line results at the top line and margin front, led by growth across the domestic market. The company reported higher-than-expected net profit growth of 40.2% yoy, backed by the 67.7% increase in other income and higher revenue during the quarter. Domestic sales grew by 12.6%, contributing around 80% to the total revenue; the remaining contribution came in from exports, which remained flat for 1QCY2011.
The company incurred planned expenditure in two of its critical projects (Prayas, a project to deliver high-quality, low-cost healthcare to the rural population; and entry into the over-the-counter (OTC) market). These projects are slated to be the future growth drivers for the company. We maintain our estimates and remain Neutral on the stock.
Revenue growth led by the domestic segment: Aventis’ net sales grew by 10% yoy to `276cr (`251cr) for the quarter, in line with our estimates of `277cr, backed by 12.6% growth in the domestic segment. Export sales remained flat at `54.2cr, lower than our estimates of `58.2cr. Aventis reported gross margin of 50.7% (49.8%), in line with our estimates of 50.7%. OPM came in at 15.7% (14.5%), higher than our estimates of 15.3% for the quarter. Net profit came in at `50.6cr (`36.1cr), up 40.2% yoy, beating our estimates of `40.5cr.
Outlook and valuation: We expect net sales to post a 13.6% CAGR to `1,401cr and EPS to register a 15.6% CAGR to `89.9cr over CY2010–12E. At current levels, the stock is trading at 23.4x and 22.2x CY2011E and CY2012E earnings, respectively. We maintain our estimates and remain Neutral on the stock.
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If you have any further queries, feel free to call us on 022 39357600, Extn: 6864 / 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6864,6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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