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Pharmaceutical
n We expect our Pharma universe to report a growth of 6% YoY (-2% QoQ) in revenues. Sun Pharma, Cadila and
Aurobindo are expected to grow by 37%, 35% and 16% respectively, while Ranbaxy and Jubilant Life expected to degrow
by 24% and 12%. Ex-Ranbaxy and Jubilant, revenue of Pharma universe is set to grow by 15% YoY. Pharma
Universe (ex-CRAMS) is likely to grow by 8% YoY, while CRAMS space (excluding Aurobindo) is likely to de-grow by
8% YoY.
n Continued momentum in the 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, with Divi’s to be the
prime beneficiary from the pick-up in outsourcing trend.
n Increasing cost pressures due to expansion of the field force, regulatory filings/ litigation cost, pricing pressures in
US and continual investments in capacities will put the margins under pressure in Q4FY11. EBIDTA is likely to degrow
by 20% (OPM at 20% in Q4FY11E) driven by 78% and 33% YoY EBITDA decline in Ranbaxy and Jubilant Life.
Ranbaxy will be impacted because of Valtrex exclusivity in Q4FY10 which had higher margin profile. Ex-Ranbaxy and
Jubilant, EBITDA will witness 6% YoY increase (OPM at 22%). OPM for CRAMS companies (excluding Aurobindo) is
likely to contract by 565bps because of lower capacity utilization and higher base in Q4FY10.
n APAT of Pharma universe is likely to de-grow by 26% YoY (3% QoQ) driven by 83% de-growth in Ranbaxy, 66% degrowth
in Dishman and 56% de-growth in Jubilant Life. Ex-Ranbaxy, Dishman and Jubilant, APAT for Q4FY11E will
likely be flat.
n Cadila, Divi’s and Aurobindo are our top picks in the pharma space.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Pharmaceutical
n We expect our Pharma universe to report a growth of 6% YoY (-2% QoQ) in revenues. Sun Pharma, Cadila and
Aurobindo are expected to grow by 37%, 35% and 16% respectively, while Ranbaxy and Jubilant Life expected to degrow
by 24% and 12%. Ex-Ranbaxy and Jubilant, revenue of Pharma universe is set to grow by 15% YoY. Pharma
Universe (ex-CRAMS) is likely to grow by 8% YoY, while CRAMS space (excluding Aurobindo) is likely to de-grow by
8% YoY.
n Continued momentum in the 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, with Divi’s to be the
prime beneficiary from the pick-up in outsourcing trend.
n Increasing cost pressures due to expansion of the field force, regulatory filings/ litigation cost, pricing pressures in
US and continual investments in capacities will put the margins under pressure in Q4FY11. EBIDTA is likely to degrow
by 20% (OPM at 20% in Q4FY11E) driven by 78% and 33% YoY EBITDA decline in Ranbaxy and Jubilant Life.
Ranbaxy will be impacted because of Valtrex exclusivity in Q4FY10 which had higher margin profile. Ex-Ranbaxy and
Jubilant, EBITDA will witness 6% YoY increase (OPM at 22%). OPM for CRAMS companies (excluding Aurobindo) is
likely to contract by 565bps because of lower capacity utilization and higher base in Q4FY10.
n APAT of Pharma universe is likely to de-grow by 26% YoY (3% QoQ) driven by 83% de-growth in Ranbaxy, 66% degrowth
in Dishman and 56% de-growth in Jubilant Life. Ex-Ranbaxy, Dishman and Jubilant, APAT for Q4FY11E will
likely be flat.
n Cadila, Divi’s and Aurobindo are our top picks in the pharma space.
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