Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Notwithstanding a weak quarter, we remain positive on Dr Reddy’s
considering a strong pipeline that will largely unfold in FY12 and FY13
resulting in strong earnings growth. Settlement of Nexium patent
litigation provides fillip to pipeline beyond FY13. We expect branded
formulations growth to remain on track barring some blips in between. Dr
Reddy’s trades at attractive valuations on reported earnings in
comparison to the peer group. Maintain BUY.
Weak growth in branded formulations
Domestic formulations grew 14.2% YoY this quarter though for the full year we
expect the company to deliver 18-20% YoY growth.
Branded export formulations grew 4.4% YoY with 7% YoY growth in Russia and
decline in CIS sales. High base in Russia resulted in growth run rate to decline.
Betapharm drags down again
Betapharm revenues declined due to further price erosion due to new tenders
during the quarter and pricing rebates. The company won tenders related to only
three products.
Newly introduced rebates on branded portfolio in Germany also impacted the
company’s revenue growth and profitability.
US generics performance in-line
Revenues from North America grew 60% YoY, 8% QoQ helped by market share
gain in Prilosec OTC, Prevacid and Allegra generics. Full quarter impact of
Prevacid is expected to come in 4QFY11.
We expect continued strength in growth in the US revenues going into FY12
especially considering launches in 2HFY12.
Settlement of Nexium for launch in May 2014 provides fillip to the US generic
pipeline beyond FY13.
Valuations reasonable again, definite triggers later in the year
Dr Reddy’s trades at reasonable valuations in comparison to some of the other
large cap pharma names and with a number of niche prospects going forward
valuations on reported basis look attractive.
Major opportunities like Zyprexa and Geodon provide substantial uptick to FY12
profits.
Potential approval of fondaparinux ANDA could provide an immediate trigger.
Allegra D24 (approval already in place) launch remains stuck due to preliminary
injunction at district court level and the company is preparing additional data to
demonstrate non-infringement of a key patent.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Notwithstanding a weak quarter, we remain positive on Dr Reddy’s
considering a strong pipeline that will largely unfold in FY12 and FY13
resulting in strong earnings growth. Settlement of Nexium patent
litigation provides fillip to pipeline beyond FY13. We expect branded
formulations growth to remain on track barring some blips in between. Dr
Reddy’s trades at attractive valuations on reported earnings in
comparison to the peer group. Maintain BUY.
Weak growth in branded formulations
Domestic formulations grew 14.2% YoY this quarter though for the full year we
expect the company to deliver 18-20% YoY growth.
Branded export formulations grew 4.4% YoY with 7% YoY growth in Russia and
decline in CIS sales. High base in Russia resulted in growth run rate to decline.
Betapharm drags down again
Betapharm revenues declined due to further price erosion due to new tenders
during the quarter and pricing rebates. The company won tenders related to only
three products.
Newly introduced rebates on branded portfolio in Germany also impacted the
company’s revenue growth and profitability.
US generics performance in-line
Revenues from North America grew 60% YoY, 8% QoQ helped by market share
gain in Prilosec OTC, Prevacid and Allegra generics. Full quarter impact of
Prevacid is expected to come in 4QFY11.
We expect continued strength in growth in the US revenues going into FY12
especially considering launches in 2HFY12.
Settlement of Nexium for launch in May 2014 provides fillip to the US generic
pipeline beyond FY13.
Valuations reasonable again, definite triggers later in the year
Dr Reddy’s trades at reasonable valuations in comparison to some of the other
large cap pharma names and with a number of niche prospects going forward
valuations on reported basis look attractive.
Major opportunities like Zyprexa and Geodon provide substantial uptick to FY12
profits.
Potential approval of fondaparinux ANDA could provide an immediate trigger.
Allegra D24 (approval already in place) launch remains stuck due to preliminary
injunction at district court level and the company is preparing additional data to
demonstrate non-infringement of a key patent.
No comments:
Post a Comment