Sanofi India: Sturdy balance sheet, cash-generation augur well for company

High growth visibility in chronics, strong balance sheet will help sustain premium valuation

Sanofi India posted a 20 per cent growth in profit before tax (PBT), before exceptional items, for the June quarter (Q2) of calendar year 2020 (CY20), despite the lockdown leading to lower revenue.

While some therapy areas were impacted in Q2, Sanofi completed the slump sale of its Ankleshwar manufacturing facility and some of its products. Consequently, sales fell 5 per cent year-on-year (YoY).

The power brands and chronic portfolio, however, supported earnings. Analysts say the portfolio is skewed towards the high-growing chronic segment and, along with its leadership in basal insulin (for diabetes), Sanofi has an edge in the