homeearnings NewsCipla and Sun Pharma likely to show growth momentum, Divis to remain under pressure | Earnings Preview
Cipla and Sun Pharma likely to show growth momentum, Divis to remain under pressure | Earnings Preview
A poll conducted by CNBC-TV18 found that the sector should see a 9-10 percent growth in the third quarter of the current financial year.
The pharma sector has had a superlative run in the last year and as per market watchers and sector veterans, the pharma companies are likely to have a strong third quarter. A poll conducted by CNBC-TV18 found that the sector should see a 9-10 percent growth in the third quarter of the current financial year.
The performance is expected to be driven by the domestic market which is estimated to grow 10-13 percent with 5 percent growth in volume and up to 7 percent growth in prices.
When it comes to the US markets, expect continued price erosion and mid-to-high single digits on a year-on-year (YoY) basis. Margins for pharma companies could remain flattish on account of continued elevated cost base as well as price erosion in the US.
Lupin is likely to benefit from sales of the bowel drug Suprep. Companies like Lupin, Zydus, Ajanta Pharma and Natco Pharma could gain from sales of Tamiflu generic due to the US flu season. Dr Reddy’s Lab could see lower sales from Revlimid generic, the cancer drug, as it frontloaded its volumes in the previous quarter, the Q2FY23.
Meanwhile talking about specific stocks, Vishal Manchanda, Pharma Analyst at Systematix Group said that the firm has high expectations from Cipla and Sun Pharma in terms of growth, adding that Divi’s Laboratories would remain under pressure.
“Most companies should either grow high single-digit to low double-digit, but Cipla and San pharma are where we have higher expectations around growth. However, Divis should remain under pressure this quarter; probably the pressure can aggravate a bit compared to what it was in the previous quarter,” Manchanda told CNBC-TV18.
Watch the accompanying video of CNBC-TV18’s Ekta Batra to get a handle on the Q3 expectations from pharma sector in earnings special - Quarter Se Quarter Tak (QSQT).
First Published: Jan 10, 2023 5:05 PM IST
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