Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Lipitor FTF opportunity drives growth
Ranbaxy Laboratories’ (RLL) Q4CY11 numbers were better than our
expectation but forex loss was higher. RLL benefited from FTF opportunity of
generic Lipitor in the US, which could have generated revenues of $310mn
(Rs14.50bn) during the quarter. We expect generic Lipitor to contribute
significantly in Q1CY12 also. RLL revenues grew by 79%YoY and EBIDTA
margin by 1190bps during Q4CY11. However, net loss declined sharply from
Rs975mn to Rs29.83bn. We reiterate Hold on the scrip with a revised target
price of Rs460 (based on 23x CY13 EPS+FTF).
US business records good growth: During the quarter, RLL reported 79%YoY sales growth
from Rs20.91bn to Rs37.43bn. The domestic business declined by 21%YoY from Rs6.40bn to
Rs5.07bn due to market slowdown. The company’s global sales grew by 123%YoY from
Rs14.51bn to Rs32.36bn due to FTF opportunity of generic Lipitor in the US. Generic Lipitor
could have generated sales of $310mn (Rs14.50bn) during the quarter. RLL also capitalised on
the authorised generic (AG) opportunity of Caduet in the US during the quarter.
EBIDTA margin improves by 1190bps: RLL’s EBIDTA margin improved by 1190bps from
10.8% to 22.7% due to high margin generic Lipitor. Material cost declined by 1210bps from
40.9% to 28.8% of total revenues due to change in product mix. Personnel expenses were
lower by 740bps from 18.0% to 10.6% due to higher sales growth. Other expenses went up by
760bps from 30.3% to 37.9% due to high share of Teva for generic Lipitor. RLL’s other income
grew by 112%YoY from Rs771mn to Rs1,632mn due to operational forex gain of Rs947mn.
The company’s net profit before EO items improved by 341%YoY from Rs1.14bn to Rs5.03bn.
RLL provided Rs26.48bn ($500mn) for settlement of US FDA and Department of Justice (DoJ)
liabilities. Net loss after EO items went up from Rs975mn to Rs29.83bn.
Improved MS of generic Lipitor: RLL’s MS for generic Lipitor improved to 42% in Feb’12 in
the US ahead of Pfizer and Watson. The company witnessed 60-70% price fall compared to
Pfizer’s price.
Slower growth in other markets: During Q4CY11, RLL had a slower growth in other markets
namely: India -21%, Europe -1%, CIS -9%, L. America -33%.
Revival of anti-infective segment: RLL is heavily dependent on anti-infectives and derives
around 30% of its domestic income from this segment. RLL’s revenues were hit in H2CY11 due
to this slowdown in acute therapies and anti-infectives. We expect better performance in the
domestic market in CY12 with the improvement in market conditions, introduction of new
products and benefits of project Viraat.
Reiterate Hold: We have revised our CY12 EPS estimates downwards by 34% and also CY13
estimates by 35%. We expect the company to share about 50% of revenues of generic Lipitor with
Teva in CY12 and the company is facing slowdown in several markets. RLL management has given
the sales guidance of $2.2bn excluding FTF Lipitor for CY12. At the CMP of Rs426, the stock trades at
16.1x CY12E EPS of Rs26.4 (Rs7.8 base+Rs18.6 FTF) and 19.0x CY13E EPS of Rs22.4 (Rs19.9 base+Rs2.5
FTF). We reiterate Hold with a revised target price of Rs460 (based on 23x CY13E EPS of base+FTF).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Lipitor FTF opportunity drives growth
Ranbaxy Laboratories’ (RLL) Q4CY11 numbers were better than our
expectation but forex loss was higher. RLL benefited from FTF opportunity of
generic Lipitor in the US, which could have generated revenues of $310mn
(Rs14.50bn) during the quarter. We expect generic Lipitor to contribute
significantly in Q1CY12 also. RLL revenues grew by 79%YoY and EBIDTA
margin by 1190bps during Q4CY11. However, net loss declined sharply from
Rs975mn to Rs29.83bn. We reiterate Hold on the scrip with a revised target
price of Rs460 (based on 23x CY13 EPS+FTF).
US business records good growth: During the quarter, RLL reported 79%YoY sales growth
from Rs20.91bn to Rs37.43bn. The domestic business declined by 21%YoY from Rs6.40bn to
Rs5.07bn due to market slowdown. The company’s global sales grew by 123%YoY from
Rs14.51bn to Rs32.36bn due to FTF opportunity of generic Lipitor in the US. Generic Lipitor
could have generated sales of $310mn (Rs14.50bn) during the quarter. RLL also capitalised on
the authorised generic (AG) opportunity of Caduet in the US during the quarter.
EBIDTA margin improves by 1190bps: RLL’s EBIDTA margin improved by 1190bps from
10.8% to 22.7% due to high margin generic Lipitor. Material cost declined by 1210bps from
40.9% to 28.8% of total revenues due to change in product mix. Personnel expenses were
lower by 740bps from 18.0% to 10.6% due to higher sales growth. Other expenses went up by
760bps from 30.3% to 37.9% due to high share of Teva for generic Lipitor. RLL’s other income
grew by 112%YoY from Rs771mn to Rs1,632mn due to operational forex gain of Rs947mn.
The company’s net profit before EO items improved by 341%YoY from Rs1.14bn to Rs5.03bn.
RLL provided Rs26.48bn ($500mn) for settlement of US FDA and Department of Justice (DoJ)
liabilities. Net loss after EO items went up from Rs975mn to Rs29.83bn.
Improved MS of generic Lipitor: RLL’s MS for generic Lipitor improved to 42% in Feb’12 in
the US ahead of Pfizer and Watson. The company witnessed 60-70% price fall compared to
Pfizer’s price.
Slower growth in other markets: During Q4CY11, RLL had a slower growth in other markets
namely: India -21%, Europe -1%, CIS -9%, L. America -33%.
Revival of anti-infective segment: RLL is heavily dependent on anti-infectives and derives
around 30% of its domestic income from this segment. RLL’s revenues were hit in H2CY11 due
to this slowdown in acute therapies and anti-infectives. We expect better performance in the
domestic market in CY12 with the improvement in market conditions, introduction of new
products and benefits of project Viraat.
Reiterate Hold: We have revised our CY12 EPS estimates downwards by 34% and also CY13
estimates by 35%. We expect the company to share about 50% of revenues of generic Lipitor with
Teva in CY12 and the company is facing slowdown in several markets. RLL management has given
the sales guidance of $2.2bn excluding FTF Lipitor for CY12. At the CMP of Rs426, the stock trades at
16.1x CY12E EPS of Rs26.4 (Rs7.8 base+Rs18.6 FTF) and 19.0x CY13E EPS of Rs22.4 (Rs19.9 base+Rs2.5
FTF). We reiterate Hold with a revised target price of Rs460 (based on 23x CY13E EPS of base+FTF).
No comments:
Post a Comment