Analysts remain confident on the strong demand scenario for pharma sector from both domestic and export markets.
They also believe that the disruptions due to the outbreak of Covid-19 would not be meaningful from full year earnings' perspective as the benefits of weaker currency could bridge the gap.
For January-March quarter (Q4FY20), analysts at Kotak Securities expects Dr Reddy’s US business to bounce back to US$ 235 million (+US$13 million quarter on quarter), given the benefit of recent launches. The brokerage firm expects the company’s EBITDA margins at 21.7 per cent, and expects adjusted EPS to grow 46 per cent year-on-year (YoY).
Analysts at Anand Rathi Share and Stock Brokers believe Dr Reddy’s US business which has been facing revenue pressure, is likely to rebound with new product launches and gradual normalization of price erosion in its key products. Also, the company, it says, should continue to witness strong growth in India, emerging markets, Europe and PSAI business driven by volume growth, new launches and improving realizations.
“While the deal with Wockhardt strengthens India business, other strategic initiatives of the company focused on building healthy product pipeline, improving efficiency and cost controls, divesting non-core assets and engaging with USFDA to resolve outstanding concerns, create further optimism,” the brokerage firm said in a stock update.