May 07, 2013, 04.26 PM | Source: CNBC-TV18

Bullish on Glenmark, Ipca Labs among midcaps: Antique

In an interview to CNBC-TV18, Anmol Ganjoo of Antique Broking share outlook on the pharmaceutical space and trading strategies for various stocks in the sector. He is bullish on Glenmark and Ipca laboratories from the midcap pharma space.

Anmol Ganjoo

VP - Institutional Equities, JM Financial

More about the Expert...

In an interview to CNBC-TV18, Anmol Ganjoo of Antique Broking share outlook on the pharmaceutical space and trading strategies for various stocks in the sector. He is bullish on Glenmark and Ipca laboratories from the midcap pharma space.

Below is the verbatim transcript of Anmol Ganjoo’s interview on CNBC-TV18

Q: What are you expecting from Glenmark? Is it going to be another steady set of numbers?

A: Glenmark should continue to post strong numbers especially after the last quarter which was a massive beat on almost all the matrix. We do expect that performance trend to continue. However, while the numbers might continue to look very strong on a year-on-year (Y-o-Y) basis, the prognosis is not as good due to high brace.

Last quarter, you saw India growing at 30 percent. Rest of the world market is growing close to 40 percent and that’s not a performance which is likely to be repeated. On the whole, a good set of numbers. Management commentary on a lot of key catalysts will be very important and we would watch out for that.

Q: Our poll threw up an expectation of Rs 1,200 crore for revenue which would be a 16 percent growth, Rs 1,240 crore to be precise. Profit at Rs 150 crore which would be flat, are you expecting any surprises?

A: We are not expecting surprises on the numbers front because this comes on the back of very strong numbers that were posted last quarter. The numbers last quarter were up 60 percent ex of one offs like licensing income. So even if that performance is held steady, there is room for re-rating of the stock. If the earnings trajectory holds steady, there will be material upgrades as far as stock performance expectations are concerned.

Q: What about Ranbaxy ? How do you see that stock panning out?

A: Ranbaxy had a lot of trading moves in the last 8-12 months. It is difficult to be constructive on the name until we have significant visibility on the base business. Base business since last 8-10 quarters has been very lacklustre. If we do not see any material improvement in core business, earnings before interest, taxes, depreciation, and amortization (EBITDA) trends, it will be difficult to make a strong case for Ranbaxy. This quarter, you do expect Absorbica traction in the US. Last quarter we had spill over of Actos.

You will continue to see these one-offs but to take a medium to long term constructive view on the stock we need to be convinced about the base business, EBITDA trajectory and traction in the domestic business. We haven’t seen enough evidence of that, so that’s what is important in the case of Ranbaxy.

Q: Lupin has been one of the outperformers with close to 17 percent gain on a year-to-date basis, it has outperformed the pharmaceutical space as well. Today as well, it is higher by 2.5 percent, do you expect more upside from these levels? It is already trading above Rs 700 mark.

A: Lupin has a lot going in its favour. As the data from the US comes out, you have seen significant traction in Tricor. The company continues to hold a 34-35 percent market share in that important drug. For the full year, we expect a contribution of around Rs 5.50-6 clearly from this product. That’s driving near term expectation.

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READ MORE ON  EBITDA, Suprax, midcaps, Absorbica, Actos, Tricor
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