Pharma, Healthcare Q3 Results Preview - Cost Pressures Have Started Abating: ICICI Securities

ICICI Securities Report

We expect pharma and healthcare companies under our coverage to report modest growth in Q3 FY23, supported by healthy domestic performance.

Raw material and freight costs are expected to taper down slightly but still remain at elevated levels viz-a-viz pre-Covid level. Pricing pressures have started slowing down in the U.S. with the expectation of normalisation in coming months.

We expect Ebitda margin of our coverage companies to decline by 50 basis points YoY to 20.9%.

Healthcare segment (hospitals, diagnostics and devices) is likely to report healthy YoY performance driven by recovery in base business. Diagnostic companies are likely to witness a sequential decline with Q3 being a historically weak quarter for most companies.

Overall, we expect our coverage universe players to report 7.7%/5.3%/ YoY revenue/Ebitda growth and 7.2% decline in profit after tax, respectively.

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