Ranbaxy Q2 PAT may dip 19% at Rs 166.3 cr: Motilal Oswal
According to Motilal Oswal, Ranbaxy Laboratories to report a 27.8 percent growth quarter-on-quarter (down 19.1 percent Y-o-Y) in net profit at Rs 166.3 crore.
October 28, 2013 / 18:39 IST
Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the healthcare sector. The brokerage house expects Ranbaxy Laboratories to report a 27.8 percent growth quarter-on-quarter (down 19.1 percent Y-o-Y) in net profit at Rs 166.3 crore.
Revenues of Ranbaxy Laboratories are expected to increase by 11.5 percent Q-o-Q (up 26.5 percent Y-o-Y) to Rs 2,990.9 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 15.3 percent Q-o-Q (up 4.1 percent Y-o-Y) to Rs 302.7 crore.Motilal Oswal's Report on Ranbaxy Laboratories:We expect Ranbaxy Laboratories (RBXY) to post 26 percent Y-o-Y growth in core sales for 3QCY13 to INR 29.91 billion, driven by strong 80 percent growth in core US sales over a low base of 3QCY12. Reported sales is expected to grow 11 percent Y-o-Y.Core EBITDA is likely to grow just 4 percent Y-o-Y to INR 3.03 billion, mainly due to deteriorating profitability in the base business and higher R&D and remediation costs related to USFDA. Core EBITDA margin would shrink 220bp Y-o-Y to 10.1 percent.We expect adjusted PAT to decline 19 percent Y-o*Y to INR 1.66 billion mainly due to lower other income and higher interest costs.Ranbaxy had reported a forex gain of INR 1.24 billion above EBITDA in 3QCY12, against which we expect forex loss of INR 1.58 billion in 3QCY13.There was also a forex gain of INR 3.93 billion in extraordinary expenses, against which we expect a loss of INR 2.6 billion in 3QCY13.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.The stock trades at 22x FY14E and 22.1x FY15E EPS.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 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!
