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Pharmaceuticals Q3FY11 Results Preview |
n We expect our Pharma universe to report a growth of 18% YoY (6.5% QoQ) in revenues, driven by 55% and 42% YoY growth in Sun Pharma and Divi’s Labs. Pharma Universe (ex-CRAMS) is likely to grow by 19%, while CRAMS space is likely to grow at 11%.
n Strong momentum in domestic market coupled with limited competition product opportunities in the US will continue to drive growth in the generic space. In the CRAMS space, we expect gradual recovery starting this quarter onwards.
n EBIDTA is likely to grow by 17% (OPM flat at 23%) driven by 61% and 28% growth in DRL and Ranbaxy. The expansion in EBIDTA in Ranbaxy and DRL is mainly because of launch of limited competition products in the US market and higher contribution of domestic formulation business. OPM for CRAMS companies are likely to contract by 460bps because of lower capacity utilization.
n APAT of Pharma universe is likely to grow by 25% YoY (8% QoQ) driven by 264% growth in Panacea, 193% growth in Ranbaxy and 62% growth in DRL. Growth in APAT will be on account of steady operating performance, lower interest and tax outgo. Though QoQ, CRAMS companies are likely to report 20% growth, however on YoY basis, APAT is likely to decline by 16% on account of 35% and 33% de-growth in Dishman and Jubilant.
n Torrent, Ipca and Aurobindo continuous to remain our top picks in the pharma space.
n With an investment horizon of 6-9 months, we prefer a basket approach in the CRAMS space.
| Rs (mn) | Net Sales | EPS | ||||||
| | Q3 | Q3 | Gr % YoY | Gr % QoQ | Q3 | Q3 | Gr % YoY | Gr % QoQ |
| FY10 | FY11E | FY10 | FY11E | |||||
| Cadila | 9910 | 11537 | 16.40% | 3.30% | 6.2 | 8.2 | 31.80% | -1.70% |
| IPCA | 3957 | 4762 | 20.30% | -7.40% | 4.8 | 5.5 | 14.80% | -6.30% |
| Aurobindo | 9153 | 11259 | 23.00% | 1.20% | 27.3 | 27 | -1.30% | 9.20% |
| Glenmark | 6430 | 7704 | 19.80% | 3.90% | 3.9 | 4.1 | 6.60% | 11.40% |
| Panacea Biotech | 2314 | 2878 | 24.40% | 12.30% | 1.1 | 4.4 | 297.60% | 40.70% |
| Unichem | 1728 | 1929 | 11.70% | -4.50% | 3.8 | 3 | -21% | -22.50% |
| GlaxoSmithKline | 4499 | 5143 | 14.30% | -12.70% | 12.6 | 14.2 | 12.30% | -24.20% |
| Pfizer | 2048 | 2275 | 11.10% | 1.80% | 14.3 | 16.7 | 17% | 41% |
| Dr Reddy | 17296 | 20812 | 20.30% | 11.30% | 14.2 | 23 | 62.40% | 33.20% |
| Torrent Pharma | 4800 | 5725 | 19.30% | -1.50% | 9.8 | 9.7 | -0.70% | 8.10% |
| Lupin | 12708 | 15159 | 19.30% | 5.70% | 3.6 | 4.7 | 29.80% | -3% |
| Cipla | 14385 | 16075 | 11.80% | -0.50% | 3.8 | 3.6 | -6.90% | 9.30% |
| Ranbaxy | 22549 | 23613 | 4.70% | 22.00% | 2.545 | 7.6 | 199.00% | 111% |
| Sun Pharma | 10209 | 15859 | 55.30% | 15.80% | 3.2 | 3.8 | 19.70% | -21.70% |
| Emkay Pharma | 119937 | 142456 | 18.80% | 6.80% | 97 | 119 | 5% | -16% |
| | | |||||||
| CRAMS | | |||||||
| Jubilant | 9615 | 10143 | 5.50% | 2.20% | 8.5 | 5.7 | -33% | 8.60% |
| Divis lab | 1963 | 2795 | 42.40% | 8.00% | 5.1 | 6.4 | 26% | 18.90% |
| Dishman | 2223 | 2323 | 4.50% | 9.10% | 3.9 | 2.5 | -35% | 137.80% |
| Emkay CRAMS | 13801 | 15261 | 10.60% | 4.30% | 17.5 | 14.6 | 5% | -16% |
| | | | | | | | | |
| TOTAL | 133738 | 157717 | 17.90% | 6.50% | 114.3 | 133.3 | 5.00% | -16.00% |
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