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Sanofi India Limited (NSE:SANOFI) rose Rs0.20 (or 0.01%) for a second consecutive day on Tuesday bringing its two-day rise to Rs1.50 or 0.1%. The stock last traded at Rs2,350.05. Compared with the BSE Sensex Index, which rose 265.2 points (or 1.4%) on the day, this was a relative price change of -1.4%. The volume was 0.02 times the average trading of 7,625 shares.

RELATIVE VALUATION INDICATORS [RVI] FUNDAMENTALS

Bullish Signals:

Valuation

- Price/Earnings of 28.3 versus sector average of 40.8 and market average of 15.7. We estimate the shares are trading at a current year P/E of 24.7 and a forward year P/E of 21.5.

- Dividend Yield of 1.4% (based on trailing 12 months dividends of Rs33.0) versus sector average of 0.8% and market average of 1.7%.

Performance

- Return on Equity of 17.1% versus sector average of 9.7% and market average of 7.3%.

- Total Liabilities/EBITDA of 1.2 is comfortably below 5, this compares favourably with the Joseph Piotroski benchmark of 5.

- Return on Assets of 12.7% versus sector average of 4.8% and market average of 1.8%.

- Return on Capital Employed of 25.3% versus sector average of 12.6% and market average of 6.8%.

Bearish Signals:

Valuation

- Price/Sales of 3.9 versus sector average of 2.9 and market average of 0.9. We estimate the shares are trading at a current year Price/Sales of 3.4 and a forward year Price/Sales of 3.1.

- The Price to Book of 4.8 is higher than the average of 4.5 for the Pharmaceuticals sector and 1.2 for the Total Indian Market. We estimate the shares are trading at a current year Price to Book of 4.4 and a forward year Price to Book of 4.

- Tobin's Q Ratio, defined as MCap divided by Total Assets, is 3.6. Compared with the rest of the market the stock is overvalued and ranks in the bottom 6% of stocks by value of Q Ratio.

RELATIVE VALUATION INDICATORS [RVI] TECHNICALS

- Compared with the BSE Sensex Index which rose 0.7% for the week, this represented a relative price increase of 1.4% for the week.

- In the Indian market of 2,779 stocks traded today, the stock has a 6-month relative price strength of 72 (it has outperformed 72% of the market).

Beta: The Beta of this stock is 0.7. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

% Discount to high: it is at a discount of 5.5% to the 12-month high of Rs2,488.0 (traded on 28 Feb, 2013).

% Premium to low: it is at a premium of 15.5% to the 12-month low of Rs2,035.25 (traded on 04 Jun, 2012).

- The present value of Rs1,000 (PV1000) invested one year ago is Rs1,084 [vs Rs1,123 for the BSE Sensex Index], including a capital gain of Rs68 and dividend reinvested of Rs16. The total return to shareholders for 1 year is 8.4%.

 

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