For 2QCY2017, Sanofi India posted results which were below expectations on all fronts. The sales came in at `556cr v/s. `520cr expected, registering a yoy de-growth of 3.8%. On the operating front, the EBITDA margin came in at 12.7% (17.6% expected) v/s. 18.6% in 2QCY2016. Despite better GPM (Gross Profit Margin), which came in at 55.5% v/s. 51.5% in 2QCY2016, the EBIDTA margin was lower, as the other expenses rose by 35.7% yoy, while employee expenses rose by 12.4% yoy. Consequently, the Adj. PAT came in at `74cr v/s. `86cr in 2QCY2016, a yoy de-growth of 14.4%. This was against the expectations of `82cr. We maintain our Neutral rating.

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