Deepak Malik, analyst with Edelweiss, said that margins are expected to remain stable YoY and sequentially led by tight control on cost, as well as, depreciation of the Indian rupee.
Amongst big pharma, analysts expect Sun Pharmaceuticals to see a sequential decline in the US business on non-recurrence of a one-time supply opportunity. Cipla is expected to witness some competition in generic Sensipar that is likely to erode its US sales. Meanwhile, Dr Reddy's Laboratories has had five product launches in the US. In the domestic market, Torrent Pharma
is likely to clock a 10 per cent YoY growth, while Ipca is expected to benefit from strong growth in anti-malarials.
Companies like Dr Reddy's Laboratories (DRL), Torrent Pharmaceuticals, Ipca are likely to see expansion in their Ebitda margins. Edelweiss said that DRL's Ebitda margins will expand to 21 per cent as cost rationalisation continues, while Torrent's Ebitda would grow by 19 per cent YoY (implying 27.5 per cent margin). As for Ipca, the Ebitda margins will grow 22 per cent QoQ on the back of cost reduction and gross margin improvement from better mix, technology & pricing and breakeven at Bayshore, claimed Edelweiss.
On the other hand, companies like Sun Pharma, Lupin, Cipla would see some contraction in their Ebitda margins. Brokerages felt that Ebitda margins of Cadila Healthcare, Glenmark, Natco Pharma
would remain stable.
Apart from the US market, analysts expect the rest of the world (RoW) business to do reasonably well during the quarter. Kotak Securities said that the RoW business of Aurobindo to grow by 25 per cent YoY, for DRL it is expected to clock a 20 per cent growth, while for Sun Pharma
it is estimated to clock a 57 per cent growth (reflecting consolidation of Pola Pharma).