Pharma companies Q1FY22 earnings; details here

Alembic said price pressure was seen in some of their larger products and Sartans, while Strides says US market witnessed double-digit price erosion. Lupin’s US sales came in at $172 million versus estimates of nearly $200 million this quarter.

Sun Pharmaceutical Industries outperformed with a 35 percent year-on-year growth, which was aided by their speciality business.

India sales was strong with most companies outperforming due to the COVID-19 portfolio of sales and a low base. The likes of Cipla says they expect COVID-19 to still comprise of 5 to 7 percent of sales. While most companies are expecting high-teen growth.

However, going forward, the street is watching a few factors and this includes recovery in the US sales margins, price pressure in the US and India sales, as well as the resolution of regulatory issues.

Lastly, the stocks have seen a correction of anywhere between 3 and 30 percent from their 52 week highs and that is reflected in their PEs now with the largest correction in the likes of Alembic, Lupin and Dr Reddy's Laboratories.

Remember, it is important to note that, for Dr Reddy's besides Q1 miss in terms of numbers, it was also the negative news of the subpoena, which really impacted the stock.