Top takeaways from Q1FY17 : ARBP’s Q1 earning performance missed our estimates by 3% (but was just in line with street expectations), primarily due to lower than expected US sales caused by delayed launch of approved drugs.Guides for strong double digit growth in its US business in FY17 led by the planned launch of 19 approved oral dosages (with branded size of US$ 6.8bn, including gNexium) and ~8 injectables in next few months.ARBP indicated that its Europe business turned PAT positive in FY16; expects it to improve further with cost optimisation initiatives like site transfer to a low?cost manufacturing base in India.
Valuation: Phillip Capital estimate ARBP to report sales/earnings CAGRs of 13%/20% over FY16?18. In fact,they are positive on ARBP’s firm footing in the US with limited impact of price correction and robust approval flow. They retain their BUY rating with an unchanged TP of Rs 1,000, i.e., 20x FY18 EPS.