ET Intelligence Group: Sustained momentum in the US generics market and moderate domestic growth is expected to help the pharma sector report steady performance in the September quarter. Improved pricing in the US and traction in the contract development, and manufacturing organisation (CDMO) segment may offset the temporary impact of GST rate transition. Apollo Hospitals Enterprise, Lupin and Aurobindo are likely to post stronger growth.
Sun Pharma's net profit may fall by 3.4% on average from the year-ago level amid higher costs, lower sales of gRevlimid, a medicine used to treat blood cancer and a decline in domestic mix. Analysts maintain a positive medium-term view, supported by its specialty pipeline.
Net profit of Dr. Reddy's Laboratories is likely to drop by 2.4% YoY amid pricing pressure in the gRevlimid segment. The domestic businesses is however expected to grow in double digits, driven by traction in the respiratory and pain segment.
Cipla is expected to post 4.6% net profit growth YoY and modest sequential improvement, driven by sustained US sales and stable domestic demand. Analysts highlight a temporary GST-related impact on India sales but note continued strength in respiratory and chronic therapies. The company's upcoming inhalation launch may support the margin.
Aurobindo Pharma is likely to report 6% net profit growth YoY, supported by sustained traction in the US and stable pricing. Operating margin is expected to be stable, aided by better mix and cost optimisation. New product launches and improving utilisation in key facilities are likely to support earnings momentum despite normalisation in gRevlimid sales.
Lupin is expected to be the standout performer, benefiting from a full-quarter contribution by the exclusive US launch of Tolvaptan and continued domestic traction. Margin expansion to be supported by cost efficiencies, partly offset by higher R&D spending for specialty brands. According to Kotak Securities, Lupin may benefit from the launch of Glucagon, a drug to treat low blood sugar levels, thereby offsetting the impact of pricing pressure in Albuterol, which is used to treat breathing issues.
Apollo Hospitals is expected to deliver double-digit YoY growth in net profit led by higher footfall and steady growth across segments. Operating profit will be driven by recently commissioned beds and a modest increase in average revenue per patient. However, sequential performance may be slightly lower due to a decline in infection-related cases.
Sun Pharma's net profit may fall by 3.4% on average from the year-ago level amid higher costs, lower sales of gRevlimid, a medicine used to treat blood cancer and a decline in domestic mix. Analysts maintain a positive medium-term view, supported by its specialty pipeline.
Net profit of Dr. Reddy's Laboratories is likely to drop by 2.4% YoY amid pricing pressure in the gRevlimid segment. The domestic businesses is however expected to grow in double digits, driven by traction in the respiratory and pain segment.
Cipla is expected to post 4.6% net profit growth YoY and modest sequential improvement, driven by sustained US sales and stable domestic demand. Analysts highlight a temporary GST-related impact on India sales but note continued strength in respiratory and chronic therapies. The company's upcoming inhalation launch may support the margin.
Aurobindo Pharma is likely to report 6% net profit growth YoY, supported by sustained traction in the US and stable pricing. Operating margin is expected to be stable, aided by better mix and cost optimisation. New product launches and improving utilisation in key facilities are likely to support earnings momentum despite normalisation in gRevlimid sales.
Lupin is expected to be the standout performer, benefiting from a full-quarter contribution by the exclusive US launch of Tolvaptan and continued domestic traction. Margin expansion to be supported by cost efficiencies, partly offset by higher R&D spending for specialty brands. According to Kotak Securities, Lupin may benefit from the launch of Glucagon, a drug to treat low blood sugar levels, thereby offsetting the impact of pricing pressure in Albuterol, which is used to treat breathing issues.
Apollo Hospitals is expected to deliver double-digit YoY growth in net profit led by higher footfall and steady growth across segments. Operating profit will be driven by recently commissioned beds and a modest increase in average revenue per patient. However, sequential performance may be slightly lower due to a decline in infection-related cases.
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