Weak Q2CY22 on both revenues and marginsSANOFI - 8153 Change: 23.10 (0.28 %)
News: Sanofi’s Q2CY22 revenues declined by 11% YoY, while EBITDA margins contracted 828 bps YoY to 23% due to lower gross margins (down 166 bps YoY) and higher other expenditures. Subsequently, EBITDA de-grew 35% YoY to Rs 161 crore. Profit for the quarter decreased 32% YoY to Rs 120 crore. The board of directors has declared one-time special interim dividend of Rs 193 per equity share for CY22.
Views: Sanofi India’s numbers appear optically weak due to sale of Nutraceutical business, sale of distribution business for Soframycin and Sofradex brands and Covid led higher sales in Q2CY21. Sanofi has strong anti-diabetic franchise ~30% of the turnover but lacking growth in both top 5 therapies and brands. However quarterly gyrations aside, Sanofi remains a compelling MNC play with focussed approach to 1) accelerate growth in diabetes segment, 2) selective growth in established brands and 3) building key brands in consumer health portfolio.