Indoco Remedies posted results much below expectations on the net sales and profit front. The sales came in at Rs 2.26 billion V/s Rs 2.57 billion expected, posting a yoy growth of 16.1%. The sales growth was mainly driven by the exports, which rose by 21.1% yoy, while domestic sales rose only by 13.3% yoy.

Commenting on the result, Sarabjit Kour Nangra, VP research, Pharma, Angel Broking, said, ''The domestic formulations grew by 13.9% yoy, while formulation exports grew by 21.2% yoy. On the operating front, the gross margin came in at 64.8% V/s 61.2% in 2QFY2014; consequently taking the operating margins to 20.6% V/s 13.2% in 2QFY2014.

This along with the lower interest expenditure, which dipped by 49.0% yoy, aided the PBT, to register a yoy of 148.3%. However, a 148.3% yoy rise in the tax expense during the quarter, lead the net profit to come in at Rs 200 million V/s Rs 300 million expected, a yoy growth of 23.7%. We maintain our neutral rating on the stock.''

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