Sanofi India Q1 Results Review - Array Of Efforts To Lift Growth: ICICI Securities

ICICI Securities Report

Marred by brand divestments and mandated price cuts, Sanofi India Ltd.’s Q1 CY24 performance was below expectations. Adjusted growth in domestic business stood at ~8% YoY, while on a high base, exports declined ~6% YoY. Key consumer brands also did well with all the three categories registering market beating growth.

Sanofi India launched diabetes brand Soliqua in Q1 CY24, marking its foray in pre-mix insulin segment and is on track to launch Insutage and Cetapin S in May 2024.

Besides, it has entered into distribution and promotion agreement with Emcure and Cipla for its cardiac and CNS portfolio, respectively, which may be margin accretive.

NCLT has approved the demerger of its consumer business (28% of India sales) and the new entity is likely to be listed in the next few months.

We raise our CY24/25E earnings per share by 4-5% to factor in cost savings. Maintain Add with higher target price at Rs 9,345, valuing the consumer/residual business at 35 times/25 times CY25E earnings.

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