Aurobindo Pharma : Poised for strong growth: Centrum

Poised for strong growth
Aurobindo Pharma’s (APL) revenues for Q4FY13 were in line with our
expectation. However, EBIDTA margin and net profit were below our
expectations. The company reported a growth of 32%YoY in
revenues, 350bps in EBIDTA margin and 2%YoY in net profit. Sales
growth in US formulation business was 62%YoY and in EU & RoW it
was 45%YoY. API-SSP reported 14%YoY growth whereas APIcephalosporin
reported 26%YoY growth. APL has a strong pipeline
of products for the US market. The management has given a
guidance of above 20% sales growth for FY14. We have a Buy rating
for the scrip and revised target price of Rs254 from Rs245 (based on
10x Sept’14 EPS of Rs25.4).
 Excellent sales growth: APL reported 32%YoY growth in revenues from Rs11.91bn to
Rs15.70bn in Q4FY13. US formulation revenues (30% of total) grew by 62%YoY from
Rs3.01bn to Rs4.86bn. Its EU & RoW formulation business (16% of total) grew by
45%YoY from Rs1.72bn to Rs2.49bn. The API-SSP business (12% of revenues) grew by
14%YoY from Rs1.65bn to Rs1.89bn. APL’s API-cephalosporin business (15% of total)
grew by 26%YoY from Rs1.93bn to Rs2.44bn. API-ARV & others (15% of total) grew by
11%YoY from Rs2.12bn to Rs2.35bn.
 Margin improves: APL’s margin for Q4FY13 improved by 350bps from 11.8% to 15.3%
due to overall decline in costs. The company’s material cost declined by 270bps from
53.9% to 51.2% of net sales due to higher sales of formulations in the US market.
Personnel cost dropped by 50bps from 11.7% to 11.2% due to strong sales growth.
Other expenses declined by 30bps from 22.6% to 22.3%.

Numero uno position Sun Pharma :: Centrum

Numero uno position
Sun Pharma’s (SPIL) results for Q4FY13 were better than our expectations. The company reported a growth of 32%YoY in revenues, 10bps in EBIDTA margin and 23%YoY in net profit. Sales growth in US formulation business was 77%YoY and in RoW it was 22%YoY. The results of DUSA and URL generic business have been consolidated from Q4FY13 and will contribute for the full year in FY14. SPIL has demerged its formulations business into a 100% subsidiary for better focus. The Protonix lawsuit hearing is scheduled in June’13. The management has given a guidance of 18-20% sales growth in FY14. We have a Buy rating for the scrip and revised target price of Rs1,258 from Rs892 (based on 26x Sept’14 EPS of Rs48.4).

Excellent sales growth: SPIL reported 32%YoY growth in revenues from Rs23.36bn to Rs30.87bn in Q4FY13. Domestic formulation revenues (25% of total) declined by 11%YoY from Rs8.77bn to Rs7.80bn due to additional sales in Q4FY12 and change in the treatment of sales returns. Its US formulation business (57% of total) grew by 77%YoY from Rs10.11bn to Rs17.88bn. The RoW formulation business (13% of revenues) grew by 22%YoY from Rs3.23bn to Rs3.94bn. SPIL’s API business (5% of total) grew by 11%YoY from Rs1.53bn to Rs1.70bn.

Margin improves: SPIL’s margin for Q4FY13 improved by 10bps from 41.2% to 41.3% due to the decline in material cost by 380bps from 21.0% to 17.2% of net sales due to higher sales in the US market. Personnel cost dropped by 70bps from 14.9% to 14.2% due to strong sales growth. Other expenses grew by 440bps from 22.9% to 27.3% due to additional expenses of DUSA and URL generic business.

Short-term outlook for sugar weak :: Business Line

e-Dynamics IPO: A hi-tech sounding co's not so hi-tech biz :VS Fernando, Financial Analyst & Columnist

e-Dynamics Solutions: Sounds like a hi-tech e-commerce company but, hardly has any infrastructure for e-tailing despite having already raised more than Rs 15 cr as equity. Ironically, the so called e-tailing company’s current activity is dominated by investments, loans and advances!