Buy Sanofi India, target Rs 5510: Centrum Broking

Centrum Broking has a buy call on Sanofi India Ltd. with a target price of Rs 5510. The current market price of Sanofi India Ltd. is Rs 4950. The time period given by the brokerage is a year when Sanofi India Ltd. price can reach defined target.
Sanofi India Ltd., incorporated in 1956, is a mi-cap company with a market cap of Rs 11382.42 crore.

Investment rationale by Centrum
We upgrade Sanofi India (SIL) to Buy from Hold rating with TP at Rs5,510 based on 25x December’19E EPS of Rs220.4. SIL’s Q1CY18 results were in line with our expectations. The company’s revenue grew 12%YoY, margin improved 340bps to 21.8% and net profit grew by 38%YoY due to margin improvement and higher other income. The company derives ~27% of its revenue from exports of API and formulations and is likely to benefit from the same. The launch of new products and line extensions will improve the profitability. The company has sailed through price control and GST related issues.