07 October 2010

Macquarie Research: Ranbaxy Laboratories (RBXY IN, Rs569, Neutral, TP: Rs450)

Bookmark and Share


Ranbaxy Laboratories
(RBXY IN, Rs569, Neutral, TP: Rs450)
Key takeaways
􀂃 According to the management, the comprehensive settlement between the company, DoJ and
USFDA is to start by the end of CY10 and the whole process will take 2-3 months to settle.
􀂃 Management said the US, India and Japan are to be the key focus markets for Ranbaxy.
􀂃 India business: Project Viraat is on track with 1,500 sales people recruited in the last nine
months for the domestic market. Current sales force is ~ 4,000 people. Domestic sales to benefit
starting 2HCY10. Rural focus to increase market share of the company in India. Management
expects 15-20% of growth from domestic franchise.
􀂃 Japan: Company has identified products for the Japanese market. The total lead time to launch
products in Japan is around three years.
􀂃 Management believes with the comprehensive settlement in place, the EBITDA margin of the
base business will improve significantly to the mid-teens level.
Our view
􀂃 Ranbaxy, after adjusting for exclusivity value, trades at 32x CY11E earnings. A favourable DoJ
resolution remains the key upside risk to our Neutral call.

No comments:

Post a Comment