For 1QCY2017, Sanofi India posted results which were below expectations on all fronts. The sales came in at `513cr v/s. `550cr expected, registering a yoy de-growth of 1.1%. On the operating front, the EBITDA margin came in at 12.0% (17.6% expected) v/s. 17.7% in 1QCY2016. Despite better GPM (Gross Profit Margin), which came in at 54.2% v/s 53.2% in 1QCY2016, the EBIDTA margin was lower, as the other expenses rose by 26.8% yoy, while employee expenses rose by 6.9% yoy. Consequently, the Adj. PAT came in at `60cr v/s. `83cr in 1QCY2016, a yoy de-growth of 27.4%. This was against the expectations of `71cr. We maintain our Neutral rating.

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