Drugmaker Wockhardt Ltd is set to post a 50 percent rise in quarterly net profit, as companies it acquired earlier began contributing to revenue, analysts said on Friday.
A Reuters poll of analysts estimates the company's net profit at 995.1 million rupees for the quarter to March 31 with revenue expected to rise 47.4 percent to 7.71 billion rupees.
The company has bought three drugmakers since October 2006, including U.S.-based liquid generics and speciality skin products maker Morton Grove Pharmaceuticals Inc and French pharmaceutical group Negma Laboratories.
"Negma and the other companies acquired by Wockhardt have already started adding revenue." said an analyst with KR Choksey. "I am expecting revenue from Morton Grove to have come in during the quarter. Apart from that, there aren't any big drivers."
Excluding acquisition, the company's revenue may rise about 11 percent, ICICI Securities said in a report.
"We believe that Wockhardt still has to display the ability to fully leverage its assets (particularly the biotech facilities) and scale up substantially in regulated markets," brokerage Motilal Oswal, which has a 'neutral' on the stock, said in a note.
The company reports earnings on April 28.
Still, Wockhardt, which earns nearly half its revenue from Europe, is making inroads into the U.S. market. It launched the generic version of Pfizer's Zyrtec brand, chemically called cetrizine, in that country during the quarter.
"Wockhardt could benefit from rapidly improving U.S. business, focus on improving margins and de-merger of drug development research," ICICI Securities said. The brokerage has a 'buy' on the shares.
Following in the footsteps of bigger rivals like Sun Pharmaceutical Industries, Dr. Reddy's and Ranbaxy Laboratories, Wockhardt too has decided to spin off its research and development unit into a separate firm and list it later.
Wockhardt shares have slipped 27 percent in 2008, underperforming the BSE Healthcare index, which fell 4.9 percent.
Link to the article: http://in.reuters.com/article/businessNews/idINIndia-33242420080425
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