Net Sales are expected to increase by 5 percent Q-o-Q (up 5.7 percent Y-o-Y) to Rs 270.5 crore, according to Centrum.
For Q3CY16, we expect Merck to report revenue growth of 6% YoY and 5% QoQ to Rs2.71bn. Pharma sales (78% of revenues) are expected to grow by 17% YoY to Rs2.10bn. Chemical business (22% of revenues) is likely to decline by 24% YoY to Rs605mn as the company has discontinued selling vitamin E API.
The company is reducing its dependence on the low-margin chemicals business and concentrating on the high-margin pharma business. We expect the company’s flagship brands Neurobion Forte, Polybion and Nasivion to drive future growth.
The net profit is set to grow by 32% YoY to Rs165mn from Rs125mn due to margin improvement.
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