Further, high R&D cost is likely to affect financials as well, one brokerage house wrote in its report.
Aurobindo Pharma, which reports its results on November 12, is likely to see muted growth in its US business. Multiple brokerages expect profit to be in the range of Rs 600-780 crore.
Further, high R&D cost is likely to affect financials, one brokerage house wrote in its report.
Here is a gist of what multiple brokerages are forecasting for its September quarter show.
Brokerage: Kotak Institutional Equities | PAT: Rs 617.7 crore
The brokerage house expects the US business to grow by $15 million QoQ, reflecting ertapenem launch, valsartan benefit, as well as volume growth in the base business.
“We expect the RoW business to grow by 7% YoY and EU business to grow 9% YoY, and do not factor in any recovery in ARV sales,” analysts at the firm wrote in their report.
Kotak Institutional Equities also expects operating margin to expand 230 bps QoQ to 21% in the quarter.
Brokerage: Axis Securities | PAT: Rs 620 crore
Axis Securities expects US business to decline YoY on Renvela-led high Q2FY18 base; QoQ growth expected on traction in key product launches. Further, it expects a decline in margin due to higher R&D and staff costs.
Brokerage: Emkay | PAT: Rs 780 crore
Emkay expects US revenue to remain muted on a yoy basis at $281million, with ARV business expected to bounce back sequentially.Gross margins are expected to expand by 100 bps sequentially.
“Overall EBITDA margins are expected to strengthen by 53 basis points QoQ to 21%, primarily on account of the launch of high-margin products like Ertapenem and Sildenafil,” analysts wrote in their report.
Key developments to look for are the decline in overall debt as well as the traction in the US injectables business and commentary on the Sandoz portfolio
Brokerage: ICICI Securities | PAT: Rs 602 crore
ICICI Securities expects revenues to grow 5% YoY to Rs 4,639 crore mainly due to currency tailwinds. The US business is expected to grow a mere 3% YoY on a higher base. EBITDA margins are likely to decline 440 bps to 20.8% due to a higher base and higher raw material cost owing to China supply constraints.
Net profit may decline 23% YoY due to a below expected operational performance and higher tax rate.
Brokerage: Motilal Oswal | PAT: Rs 757.6 crore
The brokerage expects US business (56% of formulation sales) to grow by 15% YoY to Rs 1,950 crore. Europe and RoW sales are expected to grow 15% YoY, while API sales are estimated to grow by 11% YoY.
EBITDA margin is likely to contract moderately by 140 bps YoY (but expand 160bp QoQ) to 21.5%. Overall EBITDA is estimated to increase by ~7% to INR9b. We estimate adjusted PAT at Rs 560 crore compared to Rs 520 crore in the corresponding quarter last year.
Key issues to watch out for
Debt reduction during the quarter
Outlook for the US business (35-40 launches expected over next 12 months)
Growth outlook for FY19
