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Pharmaceuticals --ƒ Consolidated topline to grow at ~24% YoY
Pharma companies under our coverage are expected to deliver
mixed results. We are not considering numbers for Piramal and
Alembic on account of restructuring and de-merger, respectively. In
the remaining pack again Sun’s numbers will not be comparable on
account of consolidation of Taro’s numbers and also due to
discontinuance of anti-ulcerant Protonix and anti-cancer Eloxatin in
the US market. Similar is the case of Opto Circuits, which completed
the acquisition of US-based Cardiac Science. Companies like
Glenmark, Lupin, Biocon, Indoco, Elder and Ipca are expected to
report good numbers on account of new launches in the US and
other markets.
We expect Glenmark to continue with exclusivity for
antihypertensive Tarka on account of absence of competitors. Lupin
will also see good upside in sales on account of a judicious blend of
branded generics and generic generics in the US market. Dishman is
expected to see flat to tepid growth during the quarter. Overall, our
pharma universe is expected to clock ~24% sales growth YoY to |
6067 crore, mainly driven by Sun Pharma (47%), Opto Circuits
(47%), Elder Pharma (20%), Lupin (18%) and Glenmark (15%).
ƒ EBITDA to grow at ~21% YoY
We expect the EBITDA of the coverage universe to witness ~20.8%
YoY growth to | 1482 crore. Overall, we may see some pressure on
the margins front on account of currency appreciation vis-à-vis the
US dollar (~6% appreciation YoY) and other major currencies and
also due to the absence of two high margin products for Sun.
EBITDA margins are expected to be in the range of ~24-25%.
ƒ PAT to grow ~ 20% YoY
We expect the PAT of the coverage universe to witness growth of
~20% to | 1069 crore YoY. Lupin, Glenmark and Indoco are
expected to lead the pack.
Biocon We expect Biocon to post sales growth of ~16% YoY mainly driven by the biopharma
segment. The research services segment is expected to grow at a lower single digit. On
the other hand, we expect EBITDA margins to decrease ~110 bps on account of higher
staff cost and R&D expenditure
Dishman
Pharmaceuticals
We expect Dishman to post sales growth of ~7-8% YoY on the back of a revival in its
CRAMS business and shipment of backlog order, which was postponed on account of
customer request in Q2FY11. EBITDA margins will continue to remain under pressure
due to higher cost burn at Unit 9 of the Balva facility
Elder Pharma We expect sales to register growth of ~20% YoY on the back of four or five new
launches and consolidation of the Shecal brand. EBITDA margins are expected to
decline ~30 bps YoY due to an increase in the field force
Glenmark
Pharmaceuticals
Glenmark’s sales are expected to post ~15-16% YoY growth mainly driven by the US
business in general and sales from exclusivity product Tarka (potential ~ US$4 million)
and new product launches in particular. We also expect an improvement in EBITDA
margin on account of absence of competition for Tarka
Indoco
Remedies
We expect sales to witness a growth of ~22% YoY on the back of a recovery in the
Indoco and Spade divisions. Indoco launched seven products in the first half in the
domestic market that are expected to drive growth in the domestic market by ~20%
YoY. Exports to regulated markets are expected to grow ~20% YoY
Ipca
laboratories
We expect sales to grow at ~18-19% YoY on the back of a recovery in both the
domestic formulation business and tender business. Recovery in the anti-malarial
segment, CVS and anti-diabetic segments will drive the domestic formulation growth
Lupin Lupin's US business is expected to carry on the growth momentum on account of
aggressive generic launches. Complemented by good growth in the Japanese business
and improvement in Indian branded formulations, we expect Lupin to register ~16-18%
YoY growth in sales
Opto Circuits Opto’s numbers will not be comparable on account of acquisition of US-based Cardiac
Science. On a like-to-like basis, we expect sales to witness growth of ~30% YoY
mainly driven by the invasive segment. Overall EBITDA margins will dip by ~700 bps
YoY as we expect Cardiac to post loss at the EBITDA level
Sun Pharma Sun‘s numbers will not be comparable on account of the Taro acquisition. On a like-tolike basis, we expect sales to grow at ~16% YoY driven by semi regulated (~25%) and
domestic formulation business (~18%). We expect overall EBIDTA margins to decline
by ~300 bps on account of Taro consolidation
Unichem labs Unichem's sales are expected to grow at ~16% YoY mainly due to good growth in the
domestic formulation business. However, we expect EBITDA margins to dip ~ 260 bps
as the company increased the domestic field force and commissioned a new
manufacturing facility. Net profit may see marginal de-growth YoY
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