Rupee depreciation – Who will benefit?

Emkay Global Financial Services has come out with its report on rupee depreciation. According to the research firm Divis Lab to benefit the most, followed by DRL , Cipla & Sun Pharma .

Aurobindo Pharma :

• 73% of revenues come from international sales which will have a positive impact on revenues of 10% in H2FY12E & 5% in FY12E
• Company has not taken any forward covers which will have a positive impact on EBITDA of 63% in H2FY12E & 35% in FY12E
• Company has forex loans of US$600mn which will result in increase in total liabilities by Rs4.2bn in FY12E
• Overall increase in PAT is limited to just 3% in H2’12 & 2% in FY12 due to MTM loss of Rs2bn in H2 & Rs4bn in FY12E

Cadila Healthcare :

• 64% of revenues come from international sales which will have a positive impact on revenues of 10% in H2FY12E & 5% in FY12E
• Company has USD190mn in forward covers. EBITDA will increase by 12% in H2FY12E & 6% in FY12E
• Company has forex loans of US$122mn which will result in increase in total liabilities by Rs1bn in FY12E
• Overall PAT is expected to decline by 11% in H2’12 & 6% in FY12 led by MTM loss of Rs1.2bn in H2 & Rs2.7bn in FY12

Cipla :

• 56% of revenues come from international sales which will have a positive impact on revenues of 7% in H2FY12E & 4% in FY12E
• Company has not taken any forward covers which will have a positive impact on EBITDA of 14% in H2FY12E & 7% in FY12E
• Company has forex loans of US$60mn on its books
• Overall PAT is expected to increase by 15% in H2’12 & 8% in FY12

Divi’s lab :

• 91% of revenues come from international sales which will have a positive impact on revenues of 12% in H2FY12E & 7% in FY12E
• Company has not taken any forward covers. Rupee depreciation will have a positive impact on EBITDA of 37% in H2FY12E & 21% in FY12E
• Overall PAT is expected to increase by 37% in H2’12 & 21% in FY12

Dr. Reddy’s Lab :

• 80% of revenues come from international sales which will have a positive impact on revenues of 7% in H2FY12E & 4% in FY12E
• Company has taken forward covers of US$775mn and has done the cash flow hedging which will limit the upside for EBITDA at 14% in H2FY12E & 8% in FY12E
• Company has forex loans of ~US$200mn and 60% of its receivables are fixed in nature
• Overall PAT is expected to increase by 16% in H2’12 & 9% in FY12

Glenmark Pharma :

• 72% of revenues come from international sales which will have a positive impact on revenues of 13% in H2FY12E & 5% in FY12E
• Company has not taken any forward covers which will have a positive impact on EBITDA of 19% in H2FY12E & 9% in FY12E
• Company has forex loans of US$350mn which will result in increase in total liabilities by Rs1.55bn in FY12E
• However, overall PAT is expected to remain flat in H2’12 & FY12 led by MTM loss of Rs751mn in H2 and Rs1.6bn in FY12

Ipca Labs :

• 53% of revenues come from international sales which will have a positive impact on revenues of 7% in H2FY12E & 3% in FY12E
• Company has taken forward covers worth $150mn @ of Rs48.5/$ as a result gain in EBITDA will be 34% in H2FY12E & 15% in FY12E
• Company has forex loans of US$129mn which will result in increase in total liabilities by Rs201mn for H2FY12E & Rs446mn in FY12E
• Overall PAT is expected to remain flat in H2’12 and FY12 due to MTM loss of Rs632mn in H2 and Rs950mn in FY12E

Jubilant Life Sciences :

• 69% of revenues come from international sales which will have a positive impact on revenues of 11% in H2FY12E & 5% in FY12E
• Company has not taken any forward covers which will have a positive impact on EBITDA of 33% in H2FY12E & 14% in FY12E
• Company has forex loans of US$403mn which will result in increase in total liabilities by Rs1.2bn for H2FY12E & Rs1.6bn in FY12E
• Overall PAT is expected to decline by 18% in H2’12 & 8% in FY12

Lupin :

• 69% of revenues come from international sales which will have a positive impact on revenues of 10% in H2FY12E & 5% in FY12E
• Company has taken US$200mn in forward covers. EBITDA will increase by 26% in H2FY12E & 13% in FY12E
• Company has forex loans of US$160mn which will result in increase in total liabilities by Rs1.1bn in FY12E
• However, overall PAT would improve marginally by 4% in H2’12 & 2% in FY12 led by MTM loss of Rs1.6bn in H2 & Rs2.4bn in FY12E

Ranbaxy Labs :

• 83% of revenues come from international sales which will have a positive impact on revenues of 13% in Q4CY11E & 13% in CY12E
• Company has taken forward covers of US$700mn. EBITDA will have a positive impact of 32% in Q4CY11E & 15% in CY12E
• Company has forex loans of US$122mn which will result in increase in total liabilities by Rs2.4bn in Q4CY11E
• Overall PAT is expected to decline by 78% in Q4CY11E & increase by 15% in CY12E

Sun Pharma :

• 67% of revenues come from international sales which will have a positive impact on revenues of 14% in H2FY12E & 7% in FY12E
• Company has not taken any forward covers which will have a positive impact on EBITDA of 13% in H2FY12E & 6% in FY12E
• Company has no forex loans - Overall PAT is expected to increase by 13% in H2’12 & 6% in FY12

Torrent Pharma :

• 52% of revenues come from international sales which will have a positive impact on revenues of 5% in H2FY12E & 2% in FY12E
• Company has taken forward covers worth $200mn @ of Rs48/$ and had done cash flow hedging, as a result gain in EBITDA will be only 7 in H2FY12E & 3% in FY12E
• Company has forex loans of US$80mn on its books
• Overall PAT is expected to imcrease by 9% in H2’12 & 4% in FY12 as all the losses will be taken in the balance sheet
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