Ranbaxy Labs Q1: MOST expects PAT to dip 39% at Rs 105.5 cr
Motilal Oswal expects Ranbaxy Laboratories to report a 16.7 percent growth quarter-on-quarter (decline of 38.8 percent year-on-year) in net profit at Rs 105.5 crore.
August 06, 2013 / 17:30 IST
Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the pharmaceutical sector. The brokerage house expects Ranbaxy Laboratories to report a 16.7 percent growth quarter-on-quarter (decline of 38.8 percent year-on-year) in net profit at Rs 105.5 crore.
Revenues are expected to increase by 10.5 percent Q-o-Q (up 15.5 percent Y-o-Y) to Rs 2,662.2 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 44.6 percent Q-o-Q (up 2.1 percent Y-o-Y) to Rs 253.1 crore.Motilal Oswal on Ranbaxy LaboratoriesWe expect Ranbaxy Laboratories (RBXY) to post 16 percent Y-o-Y growth in core top line for 2QCY13E at INR 26.62 billion, driven by strong 20 percent growth in core US base sales over a low base of 2QCY12.Core EBITDA is expected to grow just 2 percent Y-o-Y to INR 2.53 billion, mainly due to deteriorating profitability in the base business and higher R&D and other expenses. Core EBITDA margin would shrink by 130bp Y-o-Y to 9.5 percent.We expect adjusted PAT to decline 38 percent Y-o-Y to INR 1.05 billion, led by subdued operational performance, higher depreciation and taxes.Ranbaxy had reported a forex loss of INR 3.67 billion above EBITDA in 2QCY12 against which we expect a forex loss of INR 1.84 billion for this quarter. There was also a forex loss of INR 6 billion in extraordinary expenses, against which we expect a loss of INR 4.75 billion this quarter.We believe the outlook for Ranbaxy remains challenging as quality/compliance issues have impacted its operations and will weigh on investor confidence. It is imperative for the company to improve core business margins as one-offs have started waning off.Stock trades at 19.6x FY14E and 14.3x FY15E EPS. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
