Buy Sanofi India; target of Rs 6000: Dolat Capital
Dolat Capital’s research report on Sanofi India
CY17 has been an evolving year for the domestic pharma industry including the company, as it witnessed many events like demonitisation and GST implementation. The macro factors along with price erosion led by NPPA expansion impacted 1HCY17 performance significantly taking CY17 revenue growth to 3% YoY and PAT 7% YoY. However, post normalisation of the same, H2 delivered strong earnings performance with revenue growth of 8% and PAT 42%.
We remain positive given the management’s focus on improving operating efficiencies and adding niche focus products to the basket. We maintain BUY rating with revised TP of ` 6,000. At CMP of ` 5,078, the stock trades at 29x CY18E EPS of ` 175 and 24x CY19E EPS of ` 207.
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