Feb 28, 2013, 07.44 PM | Source: Moneycontrol.com
Emkay Global Financial Services has recommended hold rating on Ranbaxy Laboratories with a target price of Rs 400, in its February 26, 2013 research report.
, Emkay Global Financial Services |
Q4CY12 Results Revenues at Rs27bn (down 28% YoY), EBITDA at Rs 529mn (down 97%) & Net loss at Rs4.9bn. EBITDA margins were at 2% on back of 400bps impact due to contraction in gross margins and 600 bps due to increase in other expenses on back of consent decree related remedial expenses, restructuring expenses & increase in R&D exp. Going forward, margins to remain under pressure as consent decree and restructuring related expenses will continue and base business growth will weaken down. Margins improvement story looks difficult in the short term & pharma pricing policy will have meaningful impact on the India business.
Disappointing Performance overall
Valuation: Going forward, margins continue to remain under pressure as consent decree and restructuring related expenses will continue and base business growth will weaken down. Margins improvement story looks difficult in the short term & pharma pricing policy will have meaningful impact on the India business, we downgrade the stock to hold with a TP of Rs. 400 (20x Avg CY13&14E base EPS of Rs18 and NPV of Rs 35)," says Emkay Global Financial Services research report.
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