Jun 08, 2012 02:28 PM IST | Source:

Pharma sector outperforms in Q4FY12: UR Associates

UR Associates has come out with its report on pharma sector. The results season has finally come to an end and expectedly pharma sector has outperformed many other sectors.

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UR Associates has come out with its report on pharma sector.

The results season has finally come to an end and expectedly pharma sector has outperformed many other sectors. The domestic slowdown does not seem to have much effect on the industry as most of the large pharma companies have managed to grow over 20%. Also, the exports growth has been very strong thanks to depreciation of rupee resulting in higher rupee realizations from export sales and also new product launches in the world’s largest pharmaceutical market, US. Sun Pharma, Ranbaxy Labs, Cipla, Divi's Laboratories, Glenmark Pharma and Zydus Cadilla are some of the large pharma companies that have exhibited strong performance in the quarter ended March 31, 2012. Lupin and Dr. Reddy’s Labs had posted not so attractive results due to higher tax outgo in the former case and some one-off impairment charges that dented the net profit figure in the case of later. The strong performance of Indian pharma companies is expected to continue in the present quarter as well as rupee is at an all time low and the companies continue to launch new products in the US market. However, a few of the big one-time opportunities that existed last quarter might not be there in the present quarter. 

Last week the US senate has passed the Generic Drug User Fee Act that is expected to expedite the US FDA’s review of generic drugs and biosimilars. The US FDA is expected to strengthen its team, which will increase its vigilance on foreign drug facilities that supply drugs to the US market and also hasten the process of approval of new manufacturing facilities. The GDUFA requires the generic drug industry to pay $299 million annually in user fees for the next five years beginning this October 1st. 

After a hiatus, Foreign Investment Promotion Board (FIPB) has started clearing FDI proposals in pharma sector. About 25 FDI proposals worth nearly Rs 3,000 crore were cleared across all the sectors. Pertaining to pharma sector, Plethico Pharma’s Rs 490 crore FCCBs, Ankur Drugs’ Rs 40 crore overseas capital raising program, Sun Pharma Advanced Research’s Rs 200 crore rights issue and Mauritius-based Mozart Ltd's proposal to raise Rs 300 crore have received approval.

Sun Pharma Q4 net profit surged 85.3%
Sun Pharma consolidated sales grew 59% to Rs 2,330 crore during the quarter and its operating profit margins jumped to 43% resulting in net profit surge of 85.3% to Rs 820.21 crore. The domestic business, at Rs 877 crore, contributed 37% to overall sales, growing 49% y-o-y in the quarter. For FY12 and even after adjusting one-offs, the core business growth of 21% beats the industry growth of 14%. This trend should continue as Sun, which launched 22 products during FY12, plans to launch 30 others in FY13. Thus, analysts see domestic business growing 18% in FY13. Sales outside US grew 31% y-o-y to $65 million. Taro, its Israel-based subsidiary, clocked in a sales growth of 35% y-o-y at $145 million and continued driving growth in the quarter. US supplies of anti-cancer product, Lipidox, provided impetus, with US sales of $202 mn growing 66% y-o-y in the March quarter. While there are concerns over Lipidox’s temporary supplies and Taro’s ability to drive growth in FY13, Sun’s prospects remain strong. Taro’s growth is coming on the back of the price hikes undertaken for some products and may not sustain, say analysts. Also, sales of Lipidox, which contributed 10 per cent to US sales in the quarter, may drop as Sun was shortlisted by the USFDA for supplying the drug till shortage persisted. Positively, while Taro and Lipidox may not be growth drivers in the coming days, Sun has a strong Para-IV product pipeline in the US. Of this, anti-cancer Eloxatin and anti-psychotic Lexapro are to be launched on an exclusivity basis in FY13.


Aurobindo Pharma Q4 net dips 14% at Rs 108 crore
Aurobindo Pharma reported 13.6% fall in net profit at Rs 108 crore for the Q4 ended March 31 because of sharp drop in income from contract manufacturing and US sales. Aurobindo's income grew at 2.5% to Rs 1,170 crore in the last quarter FY12, from Rs 1,142 crore in the previous fiscal. Dossier income or sales from contract manufacturing in Q4 dropped 89% to Rs 3 crore from Rs 27 crore in the same period last year. The pharma major suffered a net loss of Rs 123.5 crore for FY12, against net profit of Rs 563 crore in FY11. Consolidated net sales for the 2012 fiscal grew 10.7% to Rs 4,568 crore from Rs 4,126 crore in FY11. The company also lost revenues to the extent of $36 million (about Rs 201 crore) due the impact of USFDA alert on Unit VI in Hyderabad. Meanwhile, that K Nithyananda Reddy will relinquish his responsibilities as Managing Director of Aurobindo and has been appointed as Wholetime Director designated as Vice Chairman from June 1. Mr. Govindarajan has been appointed as a Director and Managing Director.

Ipca Labs Q4 net profit up 30.8% to Rs 77 crore
Ipca Laboratories Ltd reported a net profit of Rs 76.6 crore for the quarter ended March 31, 2012 as against a net profit of Rs 58.57 crore for the same period of previous year. The net sales increased 16.7% to Rs 553.1 crore in the quarter under review compared with Rs 473.78 crore in the corresponding period of last fiscal. The financial figures of the current quarter and fiscal are not comparable with those of the previous financial year due to amalgamation of Tonira Pharma with the company with effect from April 1, 2011. For the year ended March 31, 2012, the company’s net profit increased 9.7% to Rs 280.2 crore against Rs 255.4 crore during the previous fiscal.

Ranbaxy gets US FDA nod for acne treatment drug
Ranbaxy Laboratories Ltd. (RLL) got approval from the US Food and Drug Administration to launch Absorica in the US market. Through a business agreement with the Canadian firm, Cipher Pharmaceuticals Inc, Ranbaxy Laboratories Inc (RLI), a wholly owned subsidiary of RLL is expected to launch Absorica in the US in fourth quarter. As per the agreement, Ranbaxy will pay royalties on net sales to Cipher. Absorica, a novel, is patented brand formulation of the acne medication isotretinoin, developed by Cipher, for treatment of severe recalcitrant nodular acne. “Absorica is a milestone in our commitment to serve the dermatology community and will be the flagship brand for Ranbaxy’s specialised dermatology sales force,” Mr. Venkat Krishnan, Senior Vice President and Regional Director, Americas. The generic Isotretinion has a market size of $400-$500.

Fresenius Kabi Oncology tanks 20% as delisting hopes dim
Fresenius Kabi Oncology has tanked 20% to Rs 108, its maximum limit of the day, after Fresenius Kabi Oncology (Singapore), the promoter of the company planning to reduce his stake through “offer for sale” (OFS). “The company has received a letter dated May 30, 2012 from its promoter Fresenius Kabi Oncology (Singapore) notifying the company of its intention of undertake on or more ‘Offer (s) for sale’ on the stock exchanges for sale of up to 23.73 million shares representing approximately 15% of the total share capital of the company in one or more tranches,” Fresenius Kabi Oncology said in a filing. The company is one of the delisting candidates, in which the promoters currently hold 90% stake. The market regulator the Securities and Exchange Board of India (Sebi) has mandated all listed companies to increase public shareholding to a minimum 25% by June 2013.

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