Karvy Stock Broking has downgraded its rating on Indoco Remedies to outperformer with a target price of Rs 170 in its April 15, 2009 research report.
“Revenues for the quarter are expected to be down by 4.4 % to Rs 812.1 million for the quarter mainly on back of lack of requisite traction in domestic formulations business. Domestic formulations business is expected to show a degrowth of 15% for the quarter with revenues of Rs 520 million. Exports formulations will show growth of 10% to Rs 240 million for the quarter. Operating margins are expected to be marginally better than the preceeding quarter at 7.9%. Profits for the quarter would be lower by 84% to Rs 11.71 million for the quarter which is higher than the preceeding quarter profits of Rs 6.3 million.”
“We have reduced our EPS estimates for FY 09E by 21% to Rs 22.9 mainly on back of longer turnaround time in the domestic formulations space. We however downgrade our FY10E estimates by 2.3% to Rs 46.3. We downgrade our price target by 2.8% to Rs 170 based on 3.7x FY 10E. The stock has an attractive dividend yield of 4.3%. Due to price performance we downgrade the stock to Outperformer,” says Karvy Stock Broking’s research report.
Related posts: