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Apr-Jun 2013 Earnings Preview
Ranbaxy Laboratories
Rating
BUY
Price (Rs ) 343
Target Price (Rs) 559
M/Cap (Rs bn) 145.0
Shares o/s (m) 422.9
Key Figures (Rs m)
Y/e Dec CY12 CY13E CY14E
Net Sales 124,597 135,760 153,311
EBITDA 19,379 30,242 39,882
Margin (%) 15.6 22.3 26.0
PAT 9,228 23,110 30,887
EPS (Rs) 21.8 54.6 73.0
Growth (%) (131.8) 150.4 33.7
RoE (%) 26.5 44.1 38.9
PE (x) 15.7 6.3 4.7
P / BV (x) 3.5 2.3 1.5
EV / E (x) 6.1 3.2 1.8
We expect 14% YoY growth and 4% QoQ growth in core sales of the company in Q2
2013E on the back of favourable currency, traction in Desvenlafaxine (Pristiq) and
Absorica in US. Domestic formulation is likely to be decreased by 3% on DPCO impact
though we expect lower inventory adjustment due to lower sales growth over the
past 12-24 months. Ranbaxy received USD180mn sales in Q2 2012 from one-off sales
of Lipitor and Caduet. Core EBITDA margin to be improved to 9.7-9.9% in Q2 2013E
vs 8% in Q2 2012. The company is likely to report forex loss of INR1.6bn in Q2 2013E.
Quarterly Table (Rs m)
Y/e Dec
Q2
CY13E
Q2
CY12
YoY gr.
(%)
Q1
CY13
H1
CY13E
H1
CY12
YoY gr.
(%)
Net Sales 27,007 32,285 (16.3) 25,006 52,013 70,153 (25.9)
EBITDA 2,674 5,113 (47.7) 1,906 4,579 15,266 (70.0)
Margin (%) 9.9 15.8 (594)bps 7.6 8.8 21.8 (1,296)bps
Reported PAT 1,586 (5,801) (127.3) 1,258 2,843 6,805 (58.2)
PAT (Excl. Ex Items ) 1,586 (5,857) (127.1) 1,258 2,843 6,610 (57.0)
Operating Metrics
US generics 115 255 (54.9) 109 224 656 (65.8)
India Formulation 110 103 6.5 100 209 202 3.6
EU, CIS, Africa 158 146 8.2 158 316 292 8.2
APIs 34 31 9.7 33 67 65 3.5
Sun Pharmaceuticals
Rating
Sell
Price (Rs ) 1,043
Target Price (Rs) 871
M/Cap (Rs bn) 1,079.7
Shares o/s (m) 1,035.6
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 112,999 138,514 150,875
EBITDA 49,673 56,165 59,386
Margin (%) 44.0 40.5 39.4
PAT 30,081 11,669 41,490
EPS (Rs) 29.0 11.3 40.1
Growth (%) 16.3 (61.2) 255.5
RoE (%) 22.1 7.8 24.7
PE (x) 35.9 92.5 26.0
P / BV (x) 7.2 7.2 5.8
EV / E (x) 20.9 18.6 17.1
We expect Sun Pharma to grow at 23% YoY on the back of base effect in doemstic
formulations and incorporation of URL pharma and DUSA in H2FY13. We estimate
sales of USD14mn for DUSA and USD40mn for URL pharma including incremental
growth post acquisition. Additional medication centers and launch of Doxycycline
hyclate in US to boost core sales of the two companies respectively. Taro sales
however may see flat to negative growth due to competiton in Nystatin group of
products, which contributes 25% of Taro’s revenue.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 32,603 26,581 22.7 30,870 138,514 112,999 22.6
EBITDA 15,606 12,169 28.3 12,754 56,165 49,673 13.1
Margin (%) 47.9 45.8 209 bps 41.3 40.5 44.0 (341)bps
Reported PAT (15,347) 9,579 (260.2) 10,116 11,669 30,081 (61.2)
PAT (Excl. Ex Items ) (15,347) 9,579 (260.2) 10,116 11,669 30,081 (61.2)
Operating Metrics
Formulations 30,938 24,954 24.0 29,614 130,795 106,538 22.8
India Formulations 7,170 5,877 22.0 7,797 36,182 29,657 22.0
US Formulations 19,662 15,411 27.6 17,879 74,998 61,538 21.9
ROW Formulations 4,106 3,666 12.0 3,937 19,615 15,344 27.8
APIs 2,062 2,002 3.0 1,699 8,852 7,549 17.3
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