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Ranbaxy Labs (RANB.BO; Rs532.25; 1M)
Takeaways from Mumbai — Ranbaxy Labs presented at the Citi India Investor
Conference in Mumbai. Below are the key takeaways.
What’s New – 1) On the FDA/DOJ issue – RANB is fairly confident of the resolution
but does not have a clear cut timeline for the same. The discussions are over and it
is currently at the negotiation stage with the FDA for a settlement; 2) Generic Lipitor
launch – first preference would be from India if it gets approval, but it is comfortable
with its capacities and readiness at other locations; 3) Filed 12 ANDAs in CY10 and
believes that three could be potential FTF opportunities.
Update on Key Businesses – 1) India: Expecting strong growth and profitability, as
Project Viraat benefits start accruing; 2) US biz: Quarterly run rate of US$65-70m -
can go up post FDA resolution; 3) W. Europe: To remain opportunistic & not
compromise on margins for growth; 4) E. Europe: Branded generic markets, where
future growth is expected to be strong; 5) Asia Pac: Focused on improving
profitability through rationalizing operations and reducing cost base.
Project Viraat - RANB expects to keep growing faster than the market through new
launches (70 in FY12E) and increasing penetration through its sales force in both
urban and rural markets. RANB has increased its focus towards chronic therapies
where the growth is faster and would also look to increase its hospitals focus.
Base Biz Margin set to improve – RANB expects margins to improve to mid to
high teens primarily on: 1) India and emerging markets to show improvement in
profitability; 2) Post-FDA resolution, Paonta Sahib plant utilization is likely to go up.
Maintain Buy – We maintain our Buy rating, considering that the issues related to
the FDA are already priced in and there is momentum visible in the base biz, both in
terms of revenues and profitability.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ranbaxy Labs (RANB.BO; Rs532.25; 1M)
Takeaways from Mumbai — Ranbaxy Labs presented at the Citi India Investor
Conference in Mumbai. Below are the key takeaways.
What’s New – 1) On the FDA/DOJ issue – RANB is fairly confident of the resolution
but does not have a clear cut timeline for the same. The discussions are over and it
is currently at the negotiation stage with the FDA for a settlement; 2) Generic Lipitor
launch – first preference would be from India if it gets approval, but it is comfortable
with its capacities and readiness at other locations; 3) Filed 12 ANDAs in CY10 and
believes that three could be potential FTF opportunities.
Update on Key Businesses – 1) India: Expecting strong growth and profitability, as
Project Viraat benefits start accruing; 2) US biz: Quarterly run rate of US$65-70m -
can go up post FDA resolution; 3) W. Europe: To remain opportunistic & not
compromise on margins for growth; 4) E. Europe: Branded generic markets, where
future growth is expected to be strong; 5) Asia Pac: Focused on improving
profitability through rationalizing operations and reducing cost base.
Project Viraat - RANB expects to keep growing faster than the market through new
launches (70 in FY12E) and increasing penetration through its sales force in both
urban and rural markets. RANB has increased its focus towards chronic therapies
where the growth is faster and would also look to increase its hospitals focus.
Base Biz Margin set to improve – RANB expects margins to improve to mid to
high teens primarily on: 1) India and emerging markets to show improvement in
profitability; 2) Post-FDA resolution, Paonta Sahib plant utilization is likely to go up.
Maintain Buy – We maintain our Buy rating, considering that the issues related to
the FDA are already priced in and there is momentum visible in the base biz, both in
terms of revenues and profitability.
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