Lower input costs may aid pharma firms' Q2 margins

Analysts expect overall sales growth to be 10-11%

- SOHINI DAS

Analysts are expecting pharmaceutical companies to post sales growth of 10-11 per cent in the second quarter this financial year while the Ebitda (earnings before interest, tax, depreciation, and amortisation) margins are anticipated to improve by about 110 basis points.

Ebitda improvement will be led by lower input costs because prices of active pharmaceutical ingredients (APIs) are 5-15 per cent lower year-on-year (Y-o-Y).

Axis Capital said sales growth would be around 10 per cent, of which growth in the India market would be 11 per cent or so. And the United States (US) market would see a 4 per cent decline quarter-on-quarter (Q-o-Q) on lower generic Revlimid (cancer drug) and steady low mid-single digit price erosion.

Sun Pharmaceutical Industries has seen traction in specialty, brokerages said, while Alkem and Lupin had recent launches in the US market.

Nuvama Institutional Equities said the pharma universe would report 11 per cent revenue growth, a 17 per cent Ebitda increase, and a 19 per cent expansion in profit after tax (PAT). The Ebitda margin is expected to go up 131 basis points Y-o-Y.