Ranbaxy: Right growth prescription` - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Ranbaxy: Right growth prescription`

Jul 24, 2003

Ranbaxy has recorded an 11% increase in revenues and a strong 42% increase in bottomline. Exports constituted 64% of the total revenues. For 1HFY04, Ranbaxy has reported a 51% increase in topline and 59% increase in bottomline.

(Rs m)2QFY032QFY04Change1HFY031HFY04Change
Net Sales7,4488,27711.1%13,15819,17445.7%
Other Income259313624.0%559871694.5%
Operating expenses5,8276,64214.0%10,58414,11233.3%
Operating Profit (EBDIT)1,6211,6350.9%2,5745,06296.7%
Operating Profit Margin (%)21.8%19.8% 19.6%26.4% 
Interest (net)5317-67.9%18123-87.3%
Depreciation203188-7.4%401367-8.5%
Profit before tax and extraordinary items1,3902,36169.9%2,0475,659176.5%
Extra-ordinary Items35648-86.5%92097-89.5%
Tax 36244121.8%63499056.2%
Profit after Tax1,3841,96842.2%2,3334,766104.3%
Net profit margin (%)18.6%23.8% 17.7%24.9% 
No. of Shares (eoy) (m)116.0185.0 116.0185.0 
Diluted earnings per share*29.942.6 25.251.5 
P/E ratio 19.1  15.8 
(* annualised)      

Other income has seen a sharp rise on account of the the company receiving its share of revenues from Bayer for the sale of Ciprofloxacin OD. An increase in the R&D expenditure from Rs 365 m to Rs 486 m has resulted in a marginal drop in the operating margins.

Consolidated results snapshot
Rs m2QFY032QFY04Change
Sales9,58511,34918.4%
Operating Profit2,0613,13051.9%
Operating Margins (%)21.5%27.6% 
Net Profit1,7092,06220.7%
Net Margins (%)17.8%18.2% 

Ranbaxy had restructured its debt portfolio by borrowing US$ 10 m through the ECB route and repaying its high cost debt. The company has thus been able to bring down its interest cost by 38%. This coupled with a drop in the depreciation expenses has helped Ranbaxy record a sharp improvement in its net margin. On a consolidated basis, Ranbaxy has registered an 18% growth in the topline and a 21% increase in the bottomline during the quarter.

The stock is currently trading at Rs 812 implying a P/E of 16x its annualised 1HFY04 earnings. Considering Ranbaxy’s strong growth potential in the generics segment, which has been given a boost with the US government reducing the time period for drug approval and the inclusion of generics in the US government sponsored 'Medicare' policy, combined with its focus on developing a strong NCE and ANDA pipeline, the company has good long-term prospects. However, the risk profile of the stock is also on the higher end given the inherent risks involved in NCE research and complex regulatory procedures on the ANDA front.

Equitymaster requests your view! Post a comment on "Ranbaxy: Right growth prescription`". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

A Stock with 700% Return Potential Comes with Additional Payoffs (Profit Hunter)

Apr 15, 2021

Narayana Murthy was one of the first unicorn founders to get the backing of this entity...

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.

A Unique Sector for Short-Term Profits (Fast Profits Daily)

Apr 12, 2021

This ignored sector could deliver big short-term profits.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

RANBAXY LAB SHARE PRICE


Apr 1, 2015 (Close)

TRACK RANBAXY LAB

  • Track your investment in RANBAXY LAB with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MARKET STATS