Pharma, Healthcare Q2 Results Preview - Double-Digit Growth Led By New Launches: Axis Securities

Axis Securities Report

Pharma:

We anticipate that the pharmaceutical companies within our coverage will collectively demonstrate revenue growth of 8.5% YoY and 3.1% QoQ, along with Ebitda growth of 10.5% YoY and 3.8% QoQ.

Moreover, adjusted PAT is expected to grow by 14% YoY and 1% QoQ. This growth will likely be driven by domestic formulations and niche launches in the U.S. market.

In U.S. generics, growth is particularly driven by products such as gRevlimid, gMirabegron, gSpiriva, gAlbuterol, gPrezista, gLenalidomide, gProlensa, gChantix, and various biosimilars.

The U.S. market is anticipated to witness low single-digit growth, led by volume growth in existing products and the launch of new products in the last quarter like gMirabegron, despite elevated pricing erosion.

Meanwhile, the Indian business is expected to experience a comeback compared to the last quarter, driven by robust growth in chronic therapies and a recovery in acute therapies.

We estimate that Dr. Reddy's, Cipla, and Aurobindo will report gRevlimid sales of $125 million, $30 million, and $30 million, respectively, for Q2 FY25E.

Healthcare:

In our coverage, we anticipate that the healthcare sector will register revenue growth of 9.4% YoY and 4.5% QoQ, largely driven by an anticipated improvement in occupancies of up to 200 basis points and average revenue per occupied bed growth of 5-6%.

Our analysis indicates that KIMS and Healthcare Global could achieve growth of 12% on a YoY basis. However, Medanta may lag behind its peers due to sluggish development at the Lucknow facility, where occupancies have declined from their peak levels due to the absence of seasonality or acute cases as seen last year.

We anticipate a 10% loss in occupancies in the Lucknow unit as a result. Overall, we expect moderate revenue growth of 5% YoY, supported by the mature hospital in Gurgaon. Additionally, we project an adjusted Ebitda growth of 10.8% YoY and 7.4% QoQ for our hospital coverage.

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