Pharma firms may post better results in Q2

Indian pharmaceutical companies are expected to post better results in the second quarter of the current financial year, following recovery in the domestic business and several launches in the US market, said a report.

“Unlike the last two quarters, the Indian pharma sector will witness some relief in Q2 FY18, largely led by certain one-off factors. Channel restocking will help many companies in the India branded business and a couple of significant launches in the US market will provide a further boost,” HDFC Securities analyst Amey Chalke said.

“We foresee a 15 per cent sequential jump in revenues, and the Ebitda margin to move up to 22 per cent from 18 per cent quarteron-quarter. On a year-on-year basis, we expect single-digit topline growth. H2 FY18 is again likely to be soft, with no visibility on resolution of the FDA issues of large companies such as Sun Pharma and Dr Reddy’s Labs,” Chalke said.

Sun Pharma’s topline is likely to decline 15 per cent, owing to increasing pressure on Taro’s business and a lack of generic launches to offset pricing pressure in the base business. Domestic business is however likely to post strong growth, given channel restocking. The Ebitda margin may show some sequential improvement on the back of a better business mix.