Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Pharmaceuticals
Consolidated topline to grow at ~19% YoY
The pharma companies under our coverage are expected to post
mixed results. Sun Pharma’s numbers will not be comparable due to
consolidation of Taro’s numbers and also due to discontinuance of
anti-ulcerant Protonix and anti-cancer Eloxatin in the US market.
Similarly, the results of Opto Circuits, Elder Pharma and Biocon are
also not comparable as Opto acquired the US-based Cardiac
Science, Elder acquired Bulgaria based Biomeda and Biocon sold a
stake in Axicorp. Companies like Aurobindo, Cadila, Glenmark,
Indoco, Lupin and Torrent Pharma are expected to report good YoY
sales growth due to new launches and increase in field force. We
expect Cadila and Lupin to lead the pack with ~20% sales growth.
We expect Unichem Laboratories to report marginal growth in sales
due to a change in the distribution pattern. While healthy growth in
domestic formulations sales coupled with good growth in the US
market will drive the numbers, growth will be arrested by absence
of F2F products for Sun and Glenmark. Overall, our pharma universe
is expected to clock ~19% sales growth YoY at | 9819 crore.
EBITDA to grow mere ~5% YoY
We expect the EBITDA of the coverage universe to witness marginal
growth of ~5% YoY to | 2308 crore due to factors such as
consolidation of lower margin businesses by some companies and
absence of revenues from high margin F2Fs products. Increase in
the field force and expansion of capacities will also lead to pressure
on margins. Overall EBITDA margins for the universe are expected
to be ~ 23%.
PAT to witness marginal growth of ~ 1% YoY on high base
We expect the PAT of the coverage universe to witness a marginal
growth of ~1% to | 1558 crore YoY due to higher Q1FY11 base
which was inflated by FTF sales by Sun and Glenmark. Glenmark,
Ipca and Lupin are expected to lead the growth pack.
Company specific view
Company Remarks
Aurobindo
Pharma
Sales are expected to grow ~18% YoY driven by ~25-30% growth in US formulations
and ~20% growth in the ARV business. EBITDA margins are expected to expand
~170 bps YoY due to higher contribution from formulations. Net profit will grow more
than 125% on the back of low base in Q1FY11
Biocon We expect sales to decline 25% YoY due to divestment in Axicorp. Excluding Axicorp,
we expect like to like sales to grow 21% YoY mainly driven by both bio-pharmaceutical
and the R&D services segments. However, EBITDA margins will expand more than 900
bps due to exit from low margin Axicorp
Cadila
Healthcare
Sales are expected to grow ~20% YoY driven by ~18% growth in domestic
formulation business, 20% growth in the US business and traction from Hospira JV.
EBITDA margins may decline marginally by 40-50 bps YoY due to increase in materials
cost for the wellness business
Elder Pharma Results will not be comparable YoY as it completed the acquisition of Biomeda and
NeutraHealth. We expect overall sales to grow ~ 60% YoY and like-to-like sales to
grow ~ 19%. The growth in the base business will be driven by new launches
including line extension of the Shelcal brand
Glenmark
Pharma
We expect sales growth of 20% YoY. Excluding revenues from out-licensing deals in
Q1FY11 (US$20 million) and Q1FY12 (US$25million), the base business is expected to
increase by 19% YoY. However, EBITDA margins will contract by 200 bps on the back
of a change in the product mix
Indoco
Remedies
We expect sales growth of 19% YoY, mainly driven by growth in the domestic
formulation business and export of formulations to regulated markets. However, at the
EBITDA level we expect margins to decline 40 bps YoY due to recent addition of field
force and higher R&D expenditure
Ipca
laboratories
We expect Ipca to clock sales growth of ~15% YoY, driven by 20% growth in
domestic formulations, although export APIs to register muted growth. EBITDA
margins to improve on YoY basis due to lower growth in anti malarial business which
dented Q1FY11 margins.
Lupin We expect sales growth of ~20% YoY, mainly driven by new launches in advanced
countries, domestic formulation market and increase in the prescriptions of its
branded product Antara in the US markets. We expect EBITDA margins to decline
~40-50 bps YoY
Opto Circuits The numbers will not be comparable YoY on account of the acquisition of US based
Cardiac Science. We expect sales to grow ~75% YoY mainly driven by the Invasive
segment. On a like-to-like basis, the base business expected to grow 20%. The EBITDA
margins will decline ~900 bps YoY
Strides
Arcolab
We expect sales to grow 13% YoY on a higher base as it received higher licensing
income in Q2CY11. The specialty and pharma business are expected to grow at 15%
and 12%, respectively YoY. EBITDA margins will decline ~650 bps on the back of
lower licensing income
Sun Pharma The numbers will not be comparable due to the Taro acquisition. On a like-to-like basis,
we expect sales to decline ~10% YoY due to higher revenues from F2F drugs in
Q1FY11. Including Taro numbers, sales are expected to grow ~23.5% YoY. EBITDA
margins will decline ~1500 bps to 28.9% on the back of Taro consolidation and higher
spend for corrective measures
Torrent
Pharma
The topline is expected to grow ~18% YoY on the back of ~17% growth in the
domestic business, ~19% growth in CRAMS business and 20% growth in Brazilin
sales. However, EBITDA margins are expected to decline ~190-200 bps as it
increased its field force and completed the expansion of Indrad facility
Unichem
Labs
We expect marginal sales growth of 6% YoY due to lower growth in the domestic
formulation business on account of inventory adjustment in the distribution channel.
EBITDA margins will continue to remain under pressure (down 950 bps YoY) due to
increase in employee cost and other expenditure
Source: Company, ICICIdirect.com Research
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Pharmaceuticals
Consolidated topline to grow at ~19% YoY
The pharma companies under our coverage are expected to post
mixed results. Sun Pharma’s numbers will not be comparable due to
consolidation of Taro’s numbers and also due to discontinuance of
anti-ulcerant Protonix and anti-cancer Eloxatin in the US market.
Similarly, the results of Opto Circuits, Elder Pharma and Biocon are
also not comparable as Opto acquired the US-based Cardiac
Science, Elder acquired Bulgaria based Biomeda and Biocon sold a
stake in Axicorp. Companies like Aurobindo, Cadila, Glenmark,
Indoco, Lupin and Torrent Pharma are expected to report good YoY
sales growth due to new launches and increase in field force. We
expect Cadila and Lupin to lead the pack with ~20% sales growth.
We expect Unichem Laboratories to report marginal growth in sales
due to a change in the distribution pattern. While healthy growth in
domestic formulations sales coupled with good growth in the US
market will drive the numbers, growth will be arrested by absence
of F2F products for Sun and Glenmark. Overall, our pharma universe
is expected to clock ~19% sales growth YoY at | 9819 crore.
EBITDA to grow mere ~5% YoY
We expect the EBITDA of the coverage universe to witness marginal
growth of ~5% YoY to | 2308 crore due to factors such as
consolidation of lower margin businesses by some companies and
absence of revenues from high margin F2Fs products. Increase in
the field force and expansion of capacities will also lead to pressure
on margins. Overall EBITDA margins for the universe are expected
to be ~ 23%.
PAT to witness marginal growth of ~ 1% YoY on high base
We expect the PAT of the coverage universe to witness a marginal
growth of ~1% to | 1558 crore YoY due to higher Q1FY11 base
which was inflated by FTF sales by Sun and Glenmark. Glenmark,
Ipca and Lupin are expected to lead the growth pack.
Company specific view
Company Remarks
Aurobindo
Pharma
Sales are expected to grow ~18% YoY driven by ~25-30% growth in US formulations
and ~20% growth in the ARV business. EBITDA margins are expected to expand
~170 bps YoY due to higher contribution from formulations. Net profit will grow more
than 125% on the back of low base in Q1FY11
Biocon We expect sales to decline 25% YoY due to divestment in Axicorp. Excluding Axicorp,
we expect like to like sales to grow 21% YoY mainly driven by both bio-pharmaceutical
and the R&D services segments. However, EBITDA margins will expand more than 900
bps due to exit from low margin Axicorp
Cadila
Healthcare
Sales are expected to grow ~20% YoY driven by ~18% growth in domestic
formulation business, 20% growth in the US business and traction from Hospira JV.
EBITDA margins may decline marginally by 40-50 bps YoY due to increase in materials
cost for the wellness business
Elder Pharma Results will not be comparable YoY as it completed the acquisition of Biomeda and
NeutraHealth. We expect overall sales to grow ~ 60% YoY and like-to-like sales to
grow ~ 19%. The growth in the base business will be driven by new launches
including line extension of the Shelcal brand
Glenmark
Pharma
We expect sales growth of 20% YoY. Excluding revenues from out-licensing deals in
Q1FY11 (US$20 million) and Q1FY12 (US$25million), the base business is expected to
increase by 19% YoY. However, EBITDA margins will contract by 200 bps on the back
of a change in the product mix
Indoco
Remedies
We expect sales growth of 19% YoY, mainly driven by growth in the domestic
formulation business and export of formulations to regulated markets. However, at the
EBITDA level we expect margins to decline 40 bps YoY due to recent addition of field
force and higher R&D expenditure
Ipca
laboratories
We expect Ipca to clock sales growth of ~15% YoY, driven by 20% growth in
domestic formulations, although export APIs to register muted growth. EBITDA
margins to improve on YoY basis due to lower growth in anti malarial business which
dented Q1FY11 margins.
Lupin We expect sales growth of ~20% YoY, mainly driven by new launches in advanced
countries, domestic formulation market and increase in the prescriptions of its
branded product Antara in the US markets. We expect EBITDA margins to decline
~40-50 bps YoY
Opto Circuits The numbers will not be comparable YoY on account of the acquisition of US based
Cardiac Science. We expect sales to grow ~75% YoY mainly driven by the Invasive
segment. On a like-to-like basis, the base business expected to grow 20%. The EBITDA
margins will decline ~900 bps YoY
Strides
Arcolab
We expect sales to grow 13% YoY on a higher base as it received higher licensing
income in Q2CY11. The specialty and pharma business are expected to grow at 15%
and 12%, respectively YoY. EBITDA margins will decline ~650 bps on the back of
lower licensing income
Sun Pharma The numbers will not be comparable due to the Taro acquisition. On a like-to-like basis,
we expect sales to decline ~10% YoY due to higher revenues from F2F drugs in
Q1FY11. Including Taro numbers, sales are expected to grow ~23.5% YoY. EBITDA
margins will decline ~1500 bps to 28.9% on the back of Taro consolidation and higher
spend for corrective measures
Torrent
Pharma
The topline is expected to grow ~18% YoY on the back of ~17% growth in the
domestic business, ~19% growth in CRAMS business and 20% growth in Brazilin
sales. However, EBITDA margins are expected to decline ~190-200 bps as it
increased its field force and completed the expansion of Indrad facility
Unichem
Labs
We expect marginal sales growth of 6% YoY due to lower growth in the domestic
formulation business on account of inventory adjustment in the distribution channel.
EBITDA margins will continue to remain under pressure (down 950 bps YoY) due to
increase in employee cost and other expenditure
Source: Company, ICICIdirect.com Research
No comments:
Post a Comment