India Healthcare Q2 Results Preview - Expect Weakness In India Branded Formulations Growth: Systematix

Systematix Research Report

We expect a median YoY / QoQ revenue growth of 12%/ 5% respectively for our coverage universe. On a YoY basis, Dr. Reddy's, Zydus Lifesciences, Lupin, Mankind Pharma, Ajanta Pharma, Poly Medicure, Orchid Pharma, and Krsna Diagnostics should grow faster than peers, while from a QoQ perspective, Sun Pharma, Cipla, Mankind Pharma, Poly Medicure, Indoco Remedies, Pfizer, Sastasundar Ventures, and Krsnaa Diagnostics should fare well.

IPM is expected to grow around 8% during the quarter, with Sun Pharma, Cipla, Lupin, and Mankind Pharma expected to outperform. Since the WPI linked annual drug price inflation allowed in the DPCO portfolio this year is close to 0% (versus 12% last year) we expect lackluster growth in IPM during the quarter (around 8%).

Median YoY/ QoQ U.S. sales growth for our coverage universe should be 15%/2% respectively.

Sun Pharma, Dr. Reddy's, and Zydus Lifesciences should do better than peers in U.S. on a YoY basis. We have not seen any large limited competition launch in the U.S. during the quarter and hence do not expect any surprise on the upside, other than those on account of volatility arising out of gRevlimid quarterly variations for certain players.

Raw material / API prices remain subdued as in the previous quarter (Q1 FY25). Likewise price trends in the U.S. have also been stable during the quarter.

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