New Delhi [India], October 8 : The Indian pharmaceutical sector is set for a mixed quarter, with slow growth expected in the branded formulations, according to the Systematix Institutional Equities report.
Analysts predict a median year-on-year (YoY) revenue growth of 12 per cent and quarter-on-quarter (QoQ) growth of 5 per cent for the coverage universe.
However, companies such as Dr Reddy's Laboratories (DRRD), Zydus Lifesciences (ZYDUSLIF), Lupin (LPC), and Mankind Pharma (MANKIND) expected to outperform on a YoY basis.
But the YoY growth is expected to decline for the Indian Pharmaceutical Market (IPM), projected at approximately 8 per cent, largely due to minimal drug price inflation linked to the Wholesale Price Index (WPI), which is close to 0 per cent compared to 12 per cent last year.
Sun Pharma's domestic business is anticipated to post mid-single-digit growth, while its U.S. segment is likely to benefit from an expanded market share of generic Revlimid (gRevlimid). The company's revenue, EBITDA, and PAT are expected to grow at 7 per cent, 15 per cent, and 16 per cent QoQ respectively, and a robust 12 per cent, 31 per cent, and 38 per cent YoY.
The growth in the Contract Research and Manufacturing Services (CRAMS) division is set to outpace generics, driven by a ramp-up in contrast media. Despite a relatively flat quarter, YoY figures are promising, with expectations of 10 per cent revenue growth and a 23 per cent increase in both EBITDA and PAT.
Cipla's India business is projected to grow at a high single-digit rate, supported by a ramp-up of the generic Lanreotide launched last quarter. The U.S. business is expected to remain stable, with YoY revenue, EBITDA, and PAT growth projected at 5 per cent, 5 per cent, and 11 per cent, respectively.
Dr. Reddy's is anticipated to show double-digit growth in its India business due to a distribution agreement with Sanofi Healthcare for its vaccine portfolio. However, its U.S. business is expected to see flat QoQ growth. Revenue is projected to grow by 2 per cent QoQ and 13 per cent YoY, with EBITDA and PAT increasing by 6 per cent and 9 per cent QoQ.
While Zydus is expected to achieve mid-single-digit domestic branded formulations growth, its U.S. sales may contract sequentially. The company's wellness business is projected to grow modestly but decline QoQ due to seasonality. Despite this, YoY figures for revenue, EBITDA, and PAT are expected to grow by 20 per cent, 79 per cent, and 107 per cent.
Lupin's domestic business should see mid- to high-single-digit growth, supported by a steady contribution from generic Spiriva and new launches like gProlensa and gOracea in the U.S. YoY, revenue is expected to grow by 12 per cent, EBITDA by 38 per cent, and PAT by 64 per cent.
Mankind's domestic branded formulation sales are anticipated to grow in the low double digits, with the consumer business showing signs of recovery. Exports are expected to ramp up, with YoY revenue, EBITDA, and PAT growing by 14 per cent, 17 per cent, and 21 per cent.