New Delhi [India], January 7 : Pharma companies in India are expected to report healthy earnings growth in the just-concluded October-December quarter, averaging 19.4 per cent, as per a report by brokerage firm Motilal Oswal.
The financial services company expects aggregate sales of the domestic pharma companies to grow 10 per cent year-on-year to Rs 787 billion, aided by strong traction in domestic formulation (DF) sales and partially supported by the US segment.
"Pharma companies under our coverage are expected to report healthy YoY earnings growth of 19.4% in 3QFY25." said the report
EBITDA (earnings before interest, taxes, depreciation, and amortization), an alternate measure of profitability, is expected to exhibit growth of 16.8 per cent year-on-year to Rs 188 billion, led by a higher share of niche launches in the US generics and a decline in raw material prices.
The profit after tax (PAT) or net profit is expected to grow 19.4 per cent year-on-year to Rs 117 billion.
"For hospitals, we expect profitability to improve due to the addition of beds, higher volumes...," the report read.
In the October-December quarter, Motilal Oswal expects aggregate sales of the domestic formulation segment to grow 16.2 per cent year-on-year to Rs 209 billion for companies under its coverage.
"Compared to IPM (Indian pharmaceutical market) growth of 7 per cent YoY, the coverage companies are in good stead to perform better than IPM."
Therapy-wise, strong performance in cardiac, derma, urology, and anti-diabetic therapies has contributed to better growth compared to the IPM for the quarter.
However, Motilal Oswal asserted that to some extent, the overall IPM growth was impacted by moderate growth in respiratory/anti-infective/gynae therapy. The report says US sales may witness a moderation in yearly growth.
"For our coverage companies, we expect 5.3% YoY growth in US sales, reaching USD2.4b for the quarter. After eight quarters of double-digit growth, the US business may witness a moderation in YoY growth, led by limited launches and increased competition in base products."
Alembic Pharma, Alkem Lab, Ajanta Pharma, Apollo Hospitals, Aurobindo Pharma, Biocon, Zydus Lifesciences, Cipla, Divi's Lab, Dr Reddy's Lab, Eris Lifesciences, Gland Pharma, Glenmark Pharma, Global Health, Granules India, GSK Pharma, IPCA Lab, Laurus Labs, Lupin, Mankind Pharma, Max Healthcare, Piramal Pharma, Sun Pharma, and Torrent Pharma are some of the key companies in this space.
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