Pharma Company to Give Rs 490/share Dividend, Experts See Upside: Should you Buy this Stock?

Sanofi India has announced Rs 490 per equity share final dividend including special dividend in its latest Annual General Meeting (AGM). As per its filing on BSE, “Sanofi India Ltd has informed BSE that the Register of Members & Share Transfer Books of the Company will remain closed from April 16, 2022 to April 26, 2022 (both days inclusive) for the purpose of Payment of Final Dividend (including Special Dividend) & Annual General Meeting (AGM) of the Company to be held on April 26, 2022.”

Sanofi India Dividend

Sanofi India dividend of Rs 490 includes Rs 181 final dividend and Rs 309 per equity share special dividend. Share dividend is distribution of a listed company’s earnings to a certain class of its shareholders.

In its exchange communication, Sanofi India informed about the dividend payment proposal citing, “Recommendation for payment of a final dividend of Rs. 181 per equity share of Rs. 10 each for the year ended 31st December 2021 and a special dividend of Rs. 309 per equity share of Rs.10 each for the year ended 31st December 2021, after considering the slump sale and transfer of Company’s nutraceuticals business during the year and reviewing the cash requirements for the Company’s operations.”

Dividend payment is decided by the board of directors of the company as reward to the shareholders for investing money into its venture. It can be paid either in cash or in as additional stocks, whichever decided by the company’s AGM. So, dividend paying shares provide an additional avenue for revenue generation for the stock investors. Common shareholders of dividend-paying companies are typically eligible as long as they own the stock before the ex-dividend date.

Should you Add Sanofi India to your Portfolio?

ICICI Securities has ‘add’ call on Sanofi India with a target price of Rs 8107. The current market price of Sanofi India Ltd. is Rs 7170. Time period given by analyst is one year when Sanofi India Ltd. price can reach defined target.

Sanofi India Ltd., incorporated in the year 1956, is a Mid Cap company (having a market cap of Rs 16790.24 crore) operating in Pharmaceuticals sector. It a diversified global healthcare leader, focused on developing products that meet the health needs of people. They have extensive lines of prescription medicines and vaccines, as well as consumer health products.

Sanofi India: Financials

For the quarter ended 31-12-2021, the company reported a Standalone Total Income of Rs 704.20 Crore, down -8.45 per cent from last quarter Total Income of Rs 769.20 Crore and down -4.39 per cent from last year same quarter Total Income of Rs 736.50 Crore. Company reported net profit after tax of Rs 90.40 Crore in latest quarter.

Sanofi India: Investment Rationale

The brokerage maintains ‘add’ rating with a target price of Rs8,107/share based on 30x Jun’23E EPS. The key downside risk being the addition of key drugs in NLEM, product concentration, government intervention and presence of unlisted promoter company.

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