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Healthcare – strong numbers from
Large cap pharma companies DRL and Lupin reported strong set of Q2FY25.
DRL Revenues grew ~17% YoY to ₹ 8038 crore, with strong growth of 17% and 18% in the US and India besides growth across geographies mainly driven by new launches. There was some dent in margins which declined 326 bps to 25.8% mainly due to some one-off expenses and higher R&D.
Overall, we believe DRL’s capability of complex launches on a consistent basis across geographies to be the key determinant for overall performance going forward.
Lupin witnessed 11% YoY revenue growth driven by the India, (EMEA) markets and Growth markets which grew by 18%, 12%, and 12% respectively. US growth was relatively subdued at ~6%. EBITDA grew 42% YoY to ₹ 1308 crore and EBITDA margins stood at ~23% (472 bps improvement) mainly on the back of strong GPMs (70% vs 66%). Going forward the sustainability of this performance particularly on the margins front will require careful monitoring.
Among Hospitals, Apollo Q2FY25 numbers maintained strong momentum; Narayana Q2FY25 numbers decent for India business.
Apollo witnessed 15%(YoY) topline growth to ₹ 5589 crore during the quarter stemming from core segments of Hospitals and Pharmacy which grew 14% and 18% respectively. Hospitals margins were strong at 25% and Pharmacy also witnessed EBTIDA expansion. The company has embarked into next big capex cycle for expansion for the next 3-5 years.
Narayana saw a 7% YoY growth in revenue to ₹ 1400 crore, with decent growth of 11% YoY in India with 21% margins. On the other hand, Cayman performance was muted due to ongoing expansion. Like Apollo, Narayana also has initiated significant capex both in India and at Cayman Islands.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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