Hoechst Marion: Operating margin Zooms - Views on News from Equitymaster

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

  • MyStocks

MEMBER'S LOGINX

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

Hoechst Marion: Operating margin Zooms

Jul 30, 2001

Hoechst Marion Roussel Ltd (HMR) has posted a PBT of Rs 215 m, a rise of 47% inspite of 7% reduction in turnover. This rise was on the back of an 810 basis points improvement in operating profit margins of the company. The rise in operating margins was due to company's focus on strategic products, better efficiencies and reduction in operating expenses.

(Rs m) 2QFY01 2QFY02 Change
Sales 1,300 1,212 -6.8%
Other Income 19 13 -31.6%
Expenditure 1,132 969 -14.4%
Operating Profit (EBDIT) 168 243 44.6%
Operating Profit Margin (%) 12.9% 20.0% 55.1%
Interest 13 4 -69.2%
Depreciation 28 37 32.1%
Profit before Tax 146 215 47.3%
Extraordinary Expenses (VRS) (25) (45) 80.0%
Tax 44 48 9.1%
Profit after Tax/(Loss) 77 122 58.4%
Net profit margin (%) 5.9% 10.1%  
No. of Shares (eoy) (m) 23 23  
Diluted Earnings per share* 13.4 21.2  
P/E (at current price) 19.3  
(*- annualised)      

The company's product portfolio now includes a rather unique combination of old, mature brands as well as new products, which have met with remarkable success. Major strategic brands of the company viz Cardace (69 %), Allegra (26%) and Amaryl (58%) continued to grow at a healthy rate. Other mature brands of the company seem to have maintained their revenue contribution. While domestic sales as a whole has remained flat, exports have grown by 19%.

The company's rationalisation of product portfolio in recent years has helped in reducing the DPCO exposure from around 60% to around 35% currently. Some of the strong brands from the company's stable like Avil, Daonil, Soframycin, Novalgin however, continue to be under DPCO coverage.

At the current market price of Rs 410, the stock is trading at 15 times its expected earnings for FY02. The growth in the current year is expected to be fuelled by latest product introductions.The triggers for the stock in the near term are expected outsourcing by the parent company 6-8 months down the line, growth in strategic new products, further introduction of new products and expected dilution of DPCO. However, slowdown in topline is a cause of concern. While the strategic products have recorded good growth rates, it has slowed down compared to 1QFY02. Further, though the company currently has been able to command premium prices for its strategic products till date, it might face stiff price competition from domestic players. Thus, the operating margins might witness a downturn as product portfolio of the company matures.


Equitymaster requests your view! Post a comment on "Hoechst Marion: Operating margin Zooms". 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.

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.

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...

More

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

SANOFI INDIA SHARE PRICE


Sep 29, 2020 (Close)

TRACK SANOFI INDIA

  • 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

SANOFI INDIA - MYLAN COMPARISON

COMPARE SANOFI INDIA WITH

MARKET STATS