Right dose, good message for India Inc

Mumbai, July 26 | Updated: Jul 27 2006, 05:30am hrs

Reliance Comm PAT seen at Rs 475 crore
Reliance Communications Ltd (RCL), the country's largest CDMA operator, is expected to post an adjusted PAT of Rs 475 crore, according to a JP Morgan report. The company is also expected to see its revenue at Rs 3,173 crore and EBIDTA at Rs 1,153 crore.

I am expecting a net profit of Rs 400 crore, says Phani Shekhar, an analyst with Angel Broking. The report also says, "RCL is our top pick, followed by Bharti. RCL is trading at a 20-25% discount to Bharti on FY08E EV/EBITDA despite similar EBITDA growth rate and lower capex/sales."

The report had seen Bharti's PAT at Rs 716 crore. Bharti, however, beat those expectations with a net profit of Rs 755 crore. The company's revenues stood at Rs 3,856 crore and EBIDTA was at Rs 1,502 crore. While Bharti's has a market share at 22.5%, Reliance's share is around 20-21%.

"Revenue growth is likely to be muted due to weaker wireless sub growth but we believe a modest margin improvement in all segments should propel Q/Q EBITDA growth into double digits," the report further adds.

RCL will announce its Q1 results on July 31, its first since the company's listing on the BSE.

DRL Q1 net may more than double on US sales

Dr Reddys Laboratories Ltd (DRL), Indias third-biggest drugmaker, may say first-quarter profit more than doubled as it introduced generic medicines with fewer competitors in the US, the worlds biggest drug market.

Net income probably rose to Rs 89.9 crore in the three months ended June 30, from Rs 34.7 crore a year earlier, according to the median estimate of seven analysts surveyed by Bloomberg News. The profit estimates ranged from Rs 75 crore to Rs 156 crore. Sales may have risen 71% to Rs 958 crore from Rs 559 crore.

The drugmaker won US approval to start selling its versions of drugs including Merck & Cos Zocor and Sanofi-Aventis SAs Allegra before most rivals, allowing it to charge higher prices. US sales declined for the past four years as competition led makers including Israels Teva Pharmaceutical Industries Ltd to cut prices.

This year will be better than the last for generic companies because we saw very few launches in that space in 2005, in the US, Sanjay Sinha, who manages about $2 billion in stocks at SBI Funds Management Ltd, said. You now have a large number of drugs coming off patent in the next one year. Hyderabad-based Dr Reddys is scheduled to announce its earnings tomorrow after 3 PM local time. Earnings estimates are for the group and according to US accounting rules.