Ranbaxy Lab - Q4 CY12 Results - First Cut - Microsec

Ranbaxy Lab posted its Q4 CY12 results on 26 Feb 2013. The top-line witnessed ~29% yoy de-growth due to lower FTF launch and Lipitor recall. Lower FTF related export incentive dragged other operating income down by 26% on yoy basis. Increase in number of employees in sales & quality control resulted in 20% yoy higher employee cost. On account of higher R&D cost, inventory write-off and customer claims, EBITDA margin suffered significant reduction (~17%) as compared to last fiscal. Furthermore Rs 1,800 Mn of forex loss and Rs 1,860 Mn loss in Lipitor recall caused Ranbaxy to post a net loss of Rs 4,925 Mn.

Ranbaxy is focused on niche business opportunities and on improving base business in developed countries. On the other hand, the company has taken a step to expand capacity along with brand development in emerging markets which contribute ~27% of the top-line. During CY2012, Ranbaxy filed 5 FTFs which have market size of ~$4.3 Bn.

Although Ranbaxy is likely to launch Valcyte and Nexium in CY13 and CY14 respectively, due to lack of FTF opportunity and stiff competition in the US market (revenue contribution of 32%) we have a short term cautious view on the company.

Source : Equity Bulls

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