Should you buy this stock?

Sanofi India announced a final dividend of Rs 490 per share, including an exceptional dividend at its last Annual General Meeting (AGM). In line with its BSE filing, “Sanofi India Ltd has informed the BSE that the Company’s register of members and share transfer books will remain closed from 16 April 2022 until 26 April 2022 (both days inclusive) for the purposes of the payment of the Final Dividend (including special dividend) and Annual General Meeting (AGM) of the company to be held on April 26, 2022.”

Sanofi India Dividend

Sanofi India’s dividend of Rs 490 includes a final dividend of Rs 181 and a special dividend of Rs 309 per share. Stock dividend is the distribution of profits of a listed company to a certain category of shareholders.

In its exchange communication, Sanofi India informed about the proposed dividend payment citing, “Recommendation for the payment of a final dividend of Rs. 181 per share of Rs. 10 each for the financial year ended 31 December 2021 and a special dividend of Rs. 309 per share of Rs 10 each for the year ended 31 December 2021, after taking into account the sale and downside transfer of the company’s nutraceutical business during the year and reviewed the cash requirements for the company’s operations.”

The payment of the dividend is decided by the company’s board of directors as a reward to the shareholders for investing money in its business. It can be paid either in cash or in additional shares, depending on what will be decided by the general meeting of the company. Thus, dividend-paying stocks provide an additional opportunity to generate income for equity investors. Common shareholders of dividend-paying companies are generally eligible as long as they hold the shares before the ex-dividend date.

Should you add Sanofi India to your portfolio?

ICICI Securities has an “additional” call on Sanofi India with a target price of Rs 8107. The current market price of Sanofi India Ltd. is Rs 7170. The period given by the analyst is one year when the price of Sanofi India Ltd. can achieve the set goal.

Sanofi India Ltd., incorporated in 1956, is a mid-cap company (having a market capitalization of Rs 16790.24 crore) operating in the pharmaceutical sector. It is a diversified global healthcare leader, focused on developing products that meet people’s healthcare needs. They have extensive lines of prescription drugs and vaccines, as well as consumer health products.

Sanofi India: Financial data

For the quarter ended 31-12-2021, the company reported total standalone revenue of Rs 704.20 Crore, down -8.45% from last quarter, total revenue of Rs 769.20 Crore and down -4.39% compared to the same quarter last year. Total income of Rs 736.50 crore. The company reported a net profit after tax of Rs 90.40 Crore last quarter.

Sanofi India: Rationale for the investment

The brokerage maintains an “added” rating with a target price of Rs 8,107/share based on EPS of 30x June 23rd. The main downside risk is the addition of key drugs in the NLEM, product concentration, government intervention and the presence of an unlisted sponsor company.

Warning:Disclaimer: The views and investment advice of the experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before making any investment decision.

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