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Q2FY25 Pharma earnings trend- Decent set of numbers driven by US and India

ICICIdirect Research 14 Nov 2024 DISCLAIMER

The trend emerging from Pharma Q2FY25 numbers indicates decent performance by US and India.

Sales of the sample group (Sun, DRL, Cipla, Torrent and Zydus) have increased 12% YoY to ₹ 36334 crore, driven by India branded business growth and the US.

US portfolio witnessed Steller growth of ~19% YoY to ₹ 12729 crore and was driven by continued momentum of niche launches in the US such as anti-cancer / hormonal injections, respiratory and Specialty products

 India branded formulations grew 10% YoY to ₹ 11699 crore, driven by volume growth and price hikes.

EBITDA of the sample grew 16% YoY to ₹ 10256 crore and the margins stood at 28.2%. The margins held firm YoY despite higher R&D and SG&A expenses and the firmness was driven by outstanding US growth driven by niche launches which faced lower competition and continuous momentum from India which is a high margin business. 

We have a BUY rating on Sun Pharma (Target ₹2185), DRL (Target ₹1570), Cipla (Target ₹1685). 

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