KR Choksey has given Accumulate recommendation for Supriya Lifescience with a target price of Rs. 410 in its research report issued on Aug 18, 2022

KR Choksey’s research report on Supriya Lifescience

During Q1FY23, Supriya Lifescience Ltd (SLL) reported Revenue of INR 1,037 Mn (+31.43% YoY / -43.98% QoQ). Such growth was mainly driven by strong sales from Analgesic/Anestetic segment which contributed 51% to the topline against 15% in same period last year. On operational front EBITDA in Q1FY23 stood at INR 337 Mn (+92.91% YoY) but dipped on QoQ basis by 57.44%, OPM improved by 1,035 bps YoY and was largely impacted QoQ which came at 32.46% in Q1FY23. Increase in the cost of solvents weighed on the EBITDA margins during the quarter. Net Profit in Q1FY23 stood at INR 252 Mn against 77 Mn in Q1FY22 and it was down by 45.45% on QoQ basis. NPM came at 24.30%, up 1,454bps YoY and down marginally by 66bps on QoQ basis. EPS during the quarter came at INR 3.14 vs INR 0.96 in the same period last year.

Outlook

We recommend with “ACCUMULATE” rating on the stock as all the above mentioned factors provides good growth opportunities with a target price of INR 410/share (unchanged), applying PE multiple of 16.5x on FY24E EPS, indicating upside potential of 12.3% from CMP.

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