Aventis Pharma: Impressive performance - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Aventis Pharma: Impressive performance

Mar 19, 2004

Aventis Pharma has reported 5.8% YoY growth in topline during year ended December 2003. The bottomline growth was much faster at 61% YoY. Aventis clocked a 9.6% topline and a significant 81% bottomline growth during the quarter ended December. Let's take a detailed look at the financial performance of the company.

(Rs m) 4QFY03 4QFY04 Change FY03 FY04 Change
Net Sales 1,576 1,728 9.6% 6,157 6,516 5.8%
Other Income 26 31 19.2% 98 160 63.3%
Expenditure 1,310 1,267 -3.3% 5,185 5,119 -1.3%
Operating Profit (EBDIT) 266 461 73.3% 972 1,397 43.7%
Operating Profit Margin (%) 16.9% 26.7%   15.8% 21.4%  
Interest 0 2   4 2 -50.0%
Depreciation 38 41 7.9% 150 174 16.0%
Profit before Tax 254 449 76.8% 916 1,381 50.8%
Extraordinary income -5 0   -9 70  
Tax 81 145 79.0% 296 465 57.1%
Profit after Tax/(Loss) 168 304 81.0% 611 986 61.4%
Net profit margin (%) 10.7% 17.6%   9.9% 15.1%  
No. of Shares (m) 23 23   23 23  
Earnings per share (Rs)* 7.3 13.2   26.6 42.9  
P/E (x)         15.6  

The growth in the topline of the company in December quarter was in line with the industry growth. Some of the power brands of the company such as Cardace, Targocid, Combiflam, Avil and Soframycin fuelled the growth in the topline. These brands also continued to maintain the leadership in their respective segments. First half of the year 2003 was sluggish in growth terms for the whole pharma industry. Despite this, the performance of Aventis is commendable owing to strong bottomline growth.

Cost Break Up
As a % of sales FY03 FY04
Raw material 54.1% 50.3%
Staff cost 8.3% 8.4%
Others 21.8% 19.8%
Total Expenditure 84.2% 78.6%

A look at the table above reveals that a lot of this cost efficiency has been contributed by the shrinking of raw material costs as a percentage of sales. This also indicates a shift in the company's product profile towards higher margin products.

Continuing with its strategy of aggressive new product launches from its parent's product portfolio, Aventis Pharma introduced 'Lantus', the world's only 24-hour basal insulin in the anti–diabetics segment in the first half of the year. Considering that the new patent regime is going to be implemented from 2005, more such launches seems to be on anvil. These launches are likely to be one of the major growth drivers for the company going forward.

At Rs 667 Aventis Pharma is trading at a P/E of 15.6x FY04 earnings. With the new patent regime coming likely to come into force just 9 months from now, the company's aggressive new product launches and the resultant new product portfolio, declining DPCO cover and focus on lifestyle segments, we remain positive about the long-term prospects of the company. However, although Aventis Pharma has been successfully charging a premium for its products, the sustainability of the same in view of the rising competition in the domestic market remains a concern.

Equitymaster requests your view! Post a comment on "Aventis Pharma: Impressive performance". Click here!


More Views on News

SANOFI INDIA Announces Quarterly Results (1QFY21); Net Profit Up 39.9% (Quarterly Result Update)

Aug 26, 2020 | Updated on Aug 26, 2020

For the quarter ended June 2020, SANOFI INDIA has posted a net profit of Rs 1 bn (up 39.9% YoY). Sales on the other hand came in at Rs 7 bn (down 5.0% YoY). Read on for a complete analysis of SANOFI INDIA's quarterly results.

SANOFI INDIA Announces Quarterly Results (4QFY20); Net Profit Down 8.1% (Quarterly Result Update)

May 21, 2020 | Updated on May 21, 2020

For the quarter ended March 2020, SANOFI INDIA has posted a net profit of Rs 854 m (down 8.1% YoY). Sales on the other hand came in at Rs 8 bn (up 9.4% YoY). Read on for a complete analysis of SANOFI INDIA's quarterly results.

SANOFI INDIA 2017-18 Annual Report Analysis (Annual Result Update)

Apr 16, 2019 | Updated on Apr 16, 2019

Here's an analysis of the annual report of SANOFI INDIA for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of SANOFI INDIA. Also includes updates on the valuation of SANOFI INDIA.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 25, 2020 (Close)


  • Track your investment in SANOFI INDIA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks