INSUBCONTINENT EXCLUSIVE:
HDFC Securities has buy call on Neuland Laboratories Ltd
with a target price of Rs 1000.0
The current market price of Neuland Laboratories Ltd
is Rs 713.1 Time period given by analyst is year when Neuland Laboratories Ltd
price can reach defined target
Neuland Laboratories Ltd., incorporated in the year 1984, is a small-cap pharma company with a market cap of Rs 789.32 crore.
Investment
rational by HDFC SecuritiesAhead of expectations, Neuland Labs (NLL) ended the year with improved business performance
Top line grew 13.2% YoY/31.5% QoQ to Rs 1.6bn, with significant jump seen in Ciprofloxacin and Levetiracetam revenues during this quarter
EBITDA declined 34%YoY to Rs 188mn
However, sequential growth of 105% was encouraging
EBITDA margin stood at 11.7% (down 838bps YoY, up 420bps QoQ and 170bps ahead of expectation)
Reported PAT after merging with NHSPL and NPRPL, came in at Rs 81mn in 4QFY18.
With washout FY18 nearly over, NLL is likely to report a
This will largely be driven by returning volumes in the Niche API and CMS business segments, with all eyes on the launch of gAdvair in the
Foresee 19% revenue CAGR, 820bps margin expansion and 5.5x earnings over FY18-20E (favorable base)
At peak demand, API supply for Salmeterol, Deutetrabenazine and Trulance are likely to add Rs 43, Rs 18 and Rs 20 EPS respectively
Re-iterate BUY with a TP of Rs 1,000 (16x on FY20E EPS).
