Glenmark, Jubilant Life top picks in pharma sector: Emkay

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Glenmark, Jubilant Life top picks in pharma sector: Emkay

Emkay Global Financial Services has come out with its report on pharma space. Glenmark and Jubilant Life are top picks in pharma space.

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Emkay Global Financial Services has come out with its report on pharma space. Glenmark and Jubilant Life are top picks in pharma space.

Jubilant Life Sciences : We expect Jubilant to report 12% revenue growth in FY12 and 20% growth in FY13. We expect EBIDTA margins to improve from 16.1% in FY11 to 19.1% in FY12 and 19.3% in FY13. Earnings will grow by 21% CAGR over FY11-13E. We value the company at 10x FY13 EV/EBITDA with a target price of Rs359 and BUY rating. At CMP, the stock trades at 12xFY12E EPS of Rs17.7 and 8XFY13E EPS of Rs25.

Ipca Laboratories : We expect Ipca to report 14% growth in revenues in FY12E and 19% growth in FY13E. EBIDTA margins are expected to increase from 19.1% in FY11 to 19.9% in FY12E and 20.9% in FY13E. Earnings will grow by 23% CAGR over FY11-13E. Based on strong growth in export formulations, we maintain our rating on the stock to Buy with a target price of Rs392 (14xFY13E earnings). At CMP, IPCA trades at 11x FY12E and 9x FY13E EPS.

Glenmark Pharma : We expect Glenmark Pharma to report 24% revenue growth in FY12E and 8% growth in FY13E. We expect EBIDTA margins to move from 20.1% in FY11 to 26.1% in FY12 and 23.8% in FY13. Earnings will grow by 19% CAGR over FY11-13E. We maintain Buy rating on the stock with a target of Rs401 (18x FY12 base business earnings + adjusted NPV of Rs45). At CMP, the stock is trading at 13.9x FY12E and 14.1x FY13E earnings.

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