Pharmaceutical major Ranbaxy Laboratories will announce its earnings for the October-December quarter on Wednesday. The revision in full year revenue guidance will be key factor to watch out for.
Analysts are worried about the guidance (Rs 13,000-13,500 crore - with no first-to-file included) after the US Food and Drug Administration (USFDA) banned manufacturing and distributing active pharmaceutical ingredients from its Toansa facility. Toansa was the fourth plant that was banned by USFDA after Mohali, Dewas and Poanta.
For January-September period of CY13, Ranbaxy reported revenues of Rs 7,907 crore. Hence, for the remaining two quarters to reach this guidance it will have to do Rs 5,093 crore to Rs 5,593 crore of revenues. It means that is around Rs 2,600 crore to Rs 2,800 crore per quarter.
The company has changed its financial year to March as against December earlier, so the guidance is for 15 months.
According to CNBC-TV18 poll, analysts expect profit after tax at Rs 98 crore during October-December quarter as against loss of Rs 492 crore in same quarter last year.
Revenue is seen going up by 4 percent year-on-year to Rs 2,815 crore in the quarter gone by.
The range for expected PAT is Rs 10 crore to Rs 147 crore and for revenue - a growth of 1 percent (Rs 2,743 crore) to 6.4 percent (Rs 2,883 crore).
Analysts expect sales to get impacted by slowdown in domestic business that is likely to grow 5 percent for the quarter. Trade issues, New Pricing Policy and sentiment impact due to USFDA issues will affect sales of the company, experts feel.
US sales is expected to be at USD 125 million as against USD 127 million in previous quarter, that means in rupee terms is around Rs 775 crore versus Rs 790 crore.
US sales will be fueled by Absorica sales (launched in November 2012 and licensed from Cipher). The drug size for Ranbaxy is USD 50-55 million. However, US business will slow down due to Actos generic base effect as well.
Other markets such as Europe and Africa are expected to slow down as well. Analysts expect around USD 80 million sales from both these geogrpahies as against USD 72 million in Q3CY13, which is around 496 crore versus Rs 440 crore in rupee terms.
Operating profit or earnings before interest, tax, depreciation and amortisation may grow to Rs 250 crore from Rs 81 crore and margin may expand significantly to 8.9 percent versus 3 percent year-on-year.
Operating profit margin is a key variable for the quarter, which is expected to be impacted by remediation costs as well. But analysts expect support from lower forex losses and flat rupee on sequential basis.
Operating profit jump is due to low base in Q4CY12. October-December period of CY12 was impacted due to exceptional outflow to the tune of around Rs 394 crore (related to product recall and forex).
Meanwhile, it has been been a rocky ride for the Ranbaxy stock. After testing lows of Rs 265 in August 2013, the stock recovered to close at Rs 453 (which is a 68 percent recovery from the low) and ended 2013 with 13 percent loss. However, the stock is back close to retesting 2013 lows of Rs 269, recording a steep 28 percent fall in 2014 itself due to Toansa being added to the consent decree.
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!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
