Pharma stocks results preview for Q3FY12: KRChoksey

ALSO READ News and Notices about Cadila Health See interviews with Cadila Health Management See what other Experts & Brokerages are saying about Cadila Health See previous Results of Cadila Health

KRChoksey has come with its December quarterly earning estimates for pharma sector. According to the research firm, Q3FY12 is expected to be a strong quarter in terms of top-line growth mainly due to improved performance in the Indian pharmaceutical market, launch of limited competitive products in the US market & rupee depreciation.

"We expect Q3FY12 to be a strong quarter in terms of top-line growth mainly due to improved performance in the Indian pharmaceutical market, launch of limited competitive products in the US market & rupee depreciation. Overall operating margins would improve due to rupee depreciation but at the net level, companies with exposure to foreign currency debt & hedged on derivatives position might get impacted negatively", says KR Choksey's Research report.

Preview on Pharma:

We expect Q3FY12 to show improved performance aided mainly by pick up in the Indian pharmaceuticals market, wide penetration of generics segment due to huge patent expiry & rupee depreciation to positively impact export-oriented companies.

Overall operating margins would be positively impacted mainly due to ~15% rupee depreciation in the current quarter.

From our KRC universe, considering the foreign currency changes & the expected quarter performance major beneficiaries would be Glenmark & Dr Reddys. Ranbaxy's profit could be offsetted due to leverage & Hedging.

Factors to watch in the Q3FY12E result:

Forex loss/gain

Monetizing key Para IV/limited competition products & new product launches in US market

Top Picks:
Glenmark, Unichem

 

Company Name	Sales (Rs Cr)		PAT (Rs Cr)		Reco.
	FY12E	FY13E	FY12E	FY13E
Cadila Healthcare	5,169	5,964	826	997	BUY
Dishman	1,080	1,194	45	69	SELL
Ranbaxy	9,206	11,219	949	1,494	HOLD
Glenmark Pharma	3,606	3,925	413	509	BUY
Unichem Labs	934	1,087	93	136	BUY
Dr. Reddys	8,650	9,520	1,131	1,295	HOLD

 

 

 

 

 

 

 

 

 

 

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.