BLOG
Q1FY25 Pharma earnings trend- decent numbers driven by India and the US
- The trend emerging from Pharma Q1FY25 numbers indicates decent performance by US and India. Sales of the sample group (Sun, DRL, Cipla, Torrent) have increased 8% YoY to ₹ 29751 crore, driven by India branded business growth and the US.
- India branded formulations grew 12% YoY to ₹ 10003 crore, driven by volume growth and price hikes.
- US growth of ~10% YoY to ₹ crore was driven by niche launches in the US such as anti-cancer / hormonal injections, respiratory and Specialty products. Note that this was on a higher base of Q1FY24.
- EBITDA of the sample grew 9% YoY to ₹ 8358 crore and the margins stood at 28.1%. The margins held firm YoY despite higher R&D and SG&A expenses and the firmness was driven by higher contribution from India which is a high margin business and niche launches in the US which face lower competition.
- The margin expansion trend is continuing over the last two years which has helped these companies to generate significant free cash flows. With the capex phase is more or less completed for these players, we may witness incremental M&A activities involving companies or a portfolio of niche products.
- We have a BUY rating on CIPLA with a target ₹ 1840. For Sun, DRL and Torrent we have HOLD rating.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.