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http://content.icicidirect.com/mailimages/ICICIdirect_HealthCheck_February2012.pdf
Q 3 e a r n i n g s s e a s o n c o n c l u d es o n s t r o n g e r n o t e…
In February, most of the pharma heavyweights registered robust revenue
growth on account of strong traction in exports boosted by favourable
currency movement and growth in generics. While Dr Reddy’s numbers
were boosted by the launch of FTF generic Zyprexa, Ranbaxy’s numbers
got a boost from the launch of FTF generic Lipitor. Sun continued to ride
on the back of robust Taro numbers. GSK, Cadila and Cipla reported
more or less in-line revenue growth. In the midcap space, barring
Biocon, most of the players exceeded expectations. In case of small caps
also, most of the players (except Indoco) beat the sales estimates.
Profitability, however, took a beating for some of them on account of
notional MTM provisioning on forex loans and some one-offs.
Ranbaxy made huge provisions of | 2645 crore to settle issues pending
with the US Department of Justice in accordance with the provisions of
consent decree it signed in December. This took full effect in its Q4CY11
numbers.
USFDA, in an unprecedented move took the discretionary approval route
to allow Sun Pharma to exports cancer drug Lipdox to make good the
shortage of J&J’s cancer drug Doxil.
Sun was also in the news for a litigation tangle with Wyeth, which
slapped a damage suit worth US$960 million in the generic Protonix
case.
Piramal continued making non-pharma investments by acquiring an
additional 5.5% stake in Vodafone. Fortis made another acquisition in
Singapore by acquiring an 85% stake in RadLink Asia, which is an
outpatient diagnostic and molecular imaging chain.
Finally, the domestic formulations market grew by a healthy 16.5% in
January on the back of strong traction from CVS, anti-diabetics and
vitamins as per the latest AIOCD data. While Glenmark and Sun
registered robust secondary sales growth (31% and 23%, respectively),
Ranbaxy registered de-growth of 1.6%. For the first time, Sun overtook
GSK to bag third rank in the overall market.
S e c t o r v i e w
The BSE Healthcare index (BSEH) remained in a consolidation phase for
the second consecutive month and underperformed the broader indices
(January 27-February 29). The gap between one year forward premium
for the BSEH over the Sensex has narrowed down to ~21% from ~30%
at the start of 2012. As February also witnessed a liquidity gush on
account of huge FII inflows, buying activity in frontline Sensex stocks and
beaten down sectors continued in this month as well. December quarter
numbers for most of the companies including heavyweights were well
above expectations at least on the sales front. The profitability was
affected only on account of one-offs or MTM losses in most cases.
Healthcare being a defensive play will remain in a consolidation mode for
some more time. In the long run, however, the sector is expected to
outperform the broader market on account of 1) good traction from the
US supported by product approvals, 2) growing presence in
Pharmerging markets and 3) a strong foothold in India.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_HealthCheck_February2012.pdf
Q 3 e a r n i n g s s e a s o n c o n c l u d es o n s t r o n g e r n o t e…
In February, most of the pharma heavyweights registered robust revenue
growth on account of strong traction in exports boosted by favourable
currency movement and growth in generics. While Dr Reddy’s numbers
were boosted by the launch of FTF generic Zyprexa, Ranbaxy’s numbers
got a boost from the launch of FTF generic Lipitor. Sun continued to ride
on the back of robust Taro numbers. GSK, Cadila and Cipla reported
more or less in-line revenue growth. In the midcap space, barring
Biocon, most of the players exceeded expectations. In case of small caps
also, most of the players (except Indoco) beat the sales estimates.
Profitability, however, took a beating for some of them on account of
notional MTM provisioning on forex loans and some one-offs.
Ranbaxy made huge provisions of | 2645 crore to settle issues pending
with the US Department of Justice in accordance with the provisions of
consent decree it signed in December. This took full effect in its Q4CY11
numbers.
USFDA, in an unprecedented move took the discretionary approval route
to allow Sun Pharma to exports cancer drug Lipdox to make good the
shortage of J&J’s cancer drug Doxil.
Sun was also in the news for a litigation tangle with Wyeth, which
slapped a damage suit worth US$960 million in the generic Protonix
case.
Piramal continued making non-pharma investments by acquiring an
additional 5.5% stake in Vodafone. Fortis made another acquisition in
Singapore by acquiring an 85% stake in RadLink Asia, which is an
outpatient diagnostic and molecular imaging chain.
Finally, the domestic formulations market grew by a healthy 16.5% in
January on the back of strong traction from CVS, anti-diabetics and
vitamins as per the latest AIOCD data. While Glenmark and Sun
registered robust secondary sales growth (31% and 23%, respectively),
Ranbaxy registered de-growth of 1.6%. For the first time, Sun overtook
GSK to bag third rank in the overall market.
S e c t o r v i e w
The BSE Healthcare index (BSEH) remained in a consolidation phase for
the second consecutive month and underperformed the broader indices
(January 27-February 29). The gap between one year forward premium
for the BSEH over the Sensex has narrowed down to ~21% from ~30%
at the start of 2012. As February also witnessed a liquidity gush on
account of huge FII inflows, buying activity in frontline Sensex stocks and
beaten down sectors continued in this month as well. December quarter
numbers for most of the companies including heavyweights were well
above expectations at least on the sales front. The profitability was
affected only on account of one-offs or MTM losses in most cases.
Healthcare being a defensive play will remain in a consolidation mode for
some more time. In the long run, however, the sector is expected to
outperform the broader market on account of 1) good traction from the
US supported by product approvals, 2) growing presence in
Pharmerging markets and 3) a strong foothold in India.
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