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ICICI Securities Report
Pharma companies under our coverage are likely to report revenue/Ebitda/profit after tax growth of 15%/33%/28% YoY in Q1 FY24E.
The growth is likely to be led by new launches, market share expansion in key products and acquisition in U.S. and India. Aggregate gross margin to improve marginally QoQ (+250 basis points YoY) at 64.8% as higher raw material cost and mandated price cut in India may offset the benefit of better margins from niche U.S. launches.
However, operating leverage may drive a 90 bps QoQ (+300 bps YoY) surge in Ebitda margin to 22.4%. Aggregate profit after tax is expected to surge 28% YoY to Rs 86.6 billion.
Cipla Ltd., Sun Pharmaceutical Industries Ltd., Zydus Lifesciences Ltd., Ajanta Pharma Ltd. and Abbott India Ltd. are our top picks in pharma space.
Key risks:
Adverse outcome of U.S. Food and Drug Administration inspections, currency volatility and inclusion of more products under National List of Essential Medicine in India.
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