Unichem Laboratories an outperformer: Karvy Stock Broking

Karvy Stock Broking has maintained an outperformer rating on Unichem Laboratories with a target of Rs 632 in its October 19, 2010 research report.“Unichem Laboratories Q2FY11 net revenues grew 15.7% y-o-y to Rs 2020.4 million broadly in-line with our estimates. Domestic formulations sales grew 14.8% y-o-y to Rs 1573.2 million in-line with our estimates. Growth continued to be driven by higher sales of its products in the CVS and anti-diabetic categories partially offset by decline in sales of products in generic-generic category. Export formulation business reported 31.0% y-o-y improvement to Rs 294.3 million during Q2FY11 due to improved sales in the US market and emerging markets and part of the sales of previous quarter booked in Q2FY11.”“Unichem reported EBITDA margins of 25.1% in Q2FY11 (our estimate 25.4%) vis-a-vis 27.1% for Q2FY10. Commercialization of new facilities at Baddi, Sikkim and higher R&D cost led to the increase in other expenses during Q2FY11. Profits for the quarter were marginally higher at Rs 347 million (our estimate Rs 340 million)”