Checkout Budget Highlights 2023Sharekhan's research report on Sanofi India
Sanofi has reported soft numbers for Q4CY2022. Revenue declined by 2.3% y-o-y and PAT grew by strong 44.8%. This was due to a 635-bps YoY expansion in EBITDA margin to 24.8%, which was below streets’ expectation though. We believe the emphasis on leveraging the digital platform and divestment of the slow-moving business have led to OPM expansion. We expect a high single-digit PAT CAGR over the next three years. High-growth visibility from chronic, a strong and debt-free balance sheet, sturdy dividends, and healthy cash position are the key positives. The company has announced dividend of Rs. 377 (including second special dividend); for CY2022, it has declared Rs. 570 per share of dividend.
Outlook
We retain our Buy rating on Sanofi with a revised PT of Rs. 6,200. The stock has corrected by 14% in the last six months and is trading at reasonable valuations of 22.3x its CY2024E earnings.
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