Friday, March 25, 2011

Ranbaxy is a great buy. 2012 EPS will more than quadruple from current levels

Ranbaxy is a great buy at current levels. The 2012 EPS numbers is expected to more than quadruple in 2012, by virtue of  FTF opportunites in Actos, Provigil, Solodyn, Lipitor and Diovan. The cumulative branded sales for these drugs is close to $14b. Assuming a 50% erosion in market size and a 25% market share for Ranbaxy(authorised generics take away 50% of market share), these drugs should fetch Ranbaxy annual sales of more than $1billion. The average profitbaility of the sales should be 55% and the resulting EPS impact would to Rs 60per share.