Integration of Romanian pharma firm Terapia during January-March quarter this fiscal and higher growth in semi-regulated markets is expected to scale up Ranbaxy Laboratories Ltd?s net profit for the quarter ended June 30 by about 40% and overall sales by 11%. The company may also benefit from outstanding foreign currency convertible bonds (FCCBs) worth $400 million due to rupee appreciation against the dollar, analysts feel. Ranbaxy follows the calendar year as its fiscal year.
In terms of net profit, analysts believe that the company could notch up to Rs 160 crore on the higher side and about Rs 130 crore on the lower side as against Rs 99.8 crore reported during the same period last fiscal. Sales estimated for the period may be around Rs 1,660 crore (higher side) and Rs 1,500 on the lower side. The company posted Rs 1,044 crore sales during the second quarter last fiscal.
Profits would be driven primarily by higher growth in semi-regulated markets and consolidation of Terapia. Towards the end of the quarter, the company also received 180-day exclusivity to market 80 mg of pravastatin, which is used to prevent coronary problems.
DSP Merrill Lynch expects the company to deliver 60% year-on-year growth in net profit despite the high base from simvastatin exclusivity in the second quarter last fiscal. Though the rupee gain adversely affected the export realisation, the same provided translation gains on the outstanding FCCBs. Ranbaxy is expected to gain over Rs 98 crore on its FCCBs worth $400 million, a brokerage firm said in its report.
Rupee has risen about 7% against the dollar in the last quarter, affecting margins of most dollar-denominated exports.
?Impact of higher depreciation and higher interest cost is likely to be compensated by translation of forex gains on FCCBs, resulting in PAT growth of 58% for the quarter. We expect gradual improvement in performance beginning calendar year 2007 led by patent expiries and full benefits of acquisitions,? Mumbai-based brokerage Motilal Oswal said in a note to its clients.