Pharma Q1 Results Review – Robust Revenue With Higher Profitability, Cost Optimisation: Axis Securities

Axis Securities Report

In Q1 FY25, the pharma coverage universe posted robust revenue growth of 11%/4% YoY/QoQ, driven by a strong domestic market, new launches (especially Darunavir, DDR D, gMyrbetriq, and gSpiriva), lower price erosion, gross margin expansion through cost optimisation, and growth in the U.S. base business portfolio.

Ebitda margin improved by a healthy ~250 bps/120 bps YoY/QoQ amidst normalising cost inflation and stabilizing prices.

The U.S. base business maintained healthy momentum, with new product launches offsetting single-digit price erosion. There is increasing focus on complex molecules as Indian companies move up the value chain.

India's growth exceeded expectations, driven by field force expansion that fueled volume growth. Softening input costs and lower freight expenses contributed to improved margins. Hospitals experienced seasonally lower occupancies but saw a continuous YoY increase in average revenue per occupied bed.

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