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Centrum Broking
Sanofi India (Add)
Target: ₹7,700
CMP: ₹7,674.75
We attended Sanofi’s AGM, the management team, along with MD, Mr Rajaram Narayanan and CFO Mr Charles Billard. SIL has divested Ankleshwar unit along with the discontinuation of Zentiva supply agreement. The management highlighted that ongoing focus on the domestic market would be further emphasised with a strong focus on core brands.
Management avoided commenting on the full-year scenario given the impact of the ongoing pandemic; however, repeated that Q1 was not meaningfully impacted by the covid-19 pandemic. Large brands being in the chronic segment, we expect the pandemic impact to be on the lower side.
Management addressed the concern over the news of parent company discontinuing research on the diabetic and cardiovascular segment. According to management, the discontinuation of R&D projects in the segment pertains to early stages projects and company is focused on the segment and would be open to bring any new treatment in the above therapeutic areas to the domestic market. Management said cost optimisation as an ongoing endure of the management and would remain a key focus area.
For raw material dependencies on China, management assured availability of the back-up supplies. Increased focused on digital marketing would lead to some cost savings.
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