Motilal Oswal has come out with its third quarter (October-December) earnings estimates for the healthcare sector. The brokerage house expects Ranbaxy Laboratories to report a 83.5 percent growth quarter-on-quarter in net profit at Rs 112.1 crore.
Sales of Ranbaxy Laboratories are expected to increase by 2.8 percent Q-o-Q (up 15.7 percent Y-o-Y) to Rs 2879.1 crore, according to Motilal Oswal.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 20.5 percent Q-o-Q (up 467.1 percent Y-o-Y) to Rs 233.5 crore.
Motilal Oswal on Ranbaxy Laboratories:
We expect Ranbaxy Laboratories (RBXY) to post 6 percent YoY growth in sales for 4QFY14E to INR 28.8 billion, impacted by a slowdown in India, Europe and Africa. Excluding the upside from gActos last year, core sales are expected to grow 16 percent YoY.
EBITDA is expected to grow 188 percent YoY to INR 2.3 billion, on an abnormally low base of 4QCY12, which was impacted by gAtorvastatin recall and high consent decree related costs. Similarly, growth in core EBITDA would be 5x, with core EBITDA margin up 6.4 percent YoY.
We expect reported PAT at INR 1.4 billion, compared to INR 4.9 billion loss reported in 4QCY12. PAT, adjusted for forex impact and FTFs, is expected at INR 1.1 billion, compared to a loss of INR 45 million in the previous quarter.
We believe the outlook for RBXY remains challenging as quality/compliance issues have impacted its operations and will weigh oninvestor confidence.
It is imperative for the company to improve core business margins as one-offs have started to wane off.
The stock trades at 36.3x FY14E and 30.1x 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!
