Indian Pharma Sector's Mixed Quarter: Key Players Set to Outperform

The Indian pharmaceutical sector is anticipating a mixed quarter with overall slow growth, but key players like Dr. Reddy's and Lupin are projected to perform better on a year-on-year basis. Several companies brace for a decline in the domestic market, buffered by minimal drug price inflation.

The Indian pharmaceutical sector is poised for a fluctuating quarter, with predictions of slow growth in branded formulations according to a report by Systematix Institutional Equities. Analysts expect median year-on-year (YoY) revenue growth of 12% and quarter-on-quarter (QoQ) growth of 5% for the sector.

Despite the anticipated slowdown, companies like Dr. Reddy's Laboratories, Zydus Lifesciences, Lupin, and Mankind Pharma are expected to outshine their peers on a YoY basis. Overall, YoY growth for the Indian Pharmaceutical Market is projected to fall to around 8%, primarily due to negligible drug price inflation tied to the near-zero Wholesale Price Index compared to last year's 12%.

Sun Pharma's domestic performance may show moderate growth while its U.S. operations could see a boost from increased market share in generic Revlimid. The company anticipates growth in quarterly revenue, EBITDA, and PAT by 7%, 15%, and 16% respectively, alongside significant YoY increases. A rise in Contract Research and Manufacturing Services (CRAMS) is also expected to outpace generics.

Cipla's India operations are set to achieve high single-digit growth, driven by momentum from the recent generic Lanreotide launch. Stable U.S. business projections include moderate YoY growth across key financial metrics. Dr. Reddy's will likely exhibit robust YoY domestic growth, partly attributed to a vaccine distribution deal with Sanofi, although its U.S. operations face flat QoQ revenue figures.

Zydus may experience mid-single-digit growth in domestic brands but is projected to encounter sequential declines in U.S. sales. The wellness segment may see moderate growth but face QoQ declines due to seasonal factors. Lupin's domestic growth remains steady due to continual product launches in the U.S., with substantial YoY increases in key performance measures.

Mankind anticipates low double-digit growth in domestic branded formulation sales, alongside recovery signs in consumer business and increasing export volumes. Notably, Mankind expects revenue, EBITDA, and PAT to rise by 14%, 17%, and 21% YoY respectively.

(With inputs from agencies.)