Latest news with #Spiriva
&w=3840&q=100)
Business Standard
21-07-2025
- Business
- Business Standard
Pharma industry stares at muted Q1 earnings growth amid sliding sales
The Indian pharmaceutical industry is set to report a muted earnings performance for the first quarter of the financial year 2026 (Q1FY26), largely due to sliding sales of blockbuster generic cancer drug Revlimid coupled with moderated growth in the domestic formulations sales. Analysts estimate year-on-year (Y-o-Y) revenue growth of 9 per cent with a profit after tax (PAT) growth in the range of 3-4 per cent. Stable pricing scenario in the US generics market and rupee depreciation is expected to drive double digit revenue growth. Nuvama analysts said that the US sales will post a modest 1 per cent Y-o-Y growth affected by generic Revlimid price erosion. Some players like Lupin will see their US growth being driven by sustained market shares in products like generic Spiriva (respiratory drug) and the Tolvaptan (kidney disorder drug) launch. Aggregate margins for the pharma companies in the Nuvama universe is estimated to be around 26 per cent (down 32 bps Y-o-Y) weighed down by generic Revlimid price erosion. This ongoing price erosion in this key drug is likely to hurt US sales for Aurobindo, Dr Reddy's Laboratories (DRL), Cipla and Zydus Lifesciences in the quarter under review. Phillip Capital pointed out that DRL will continue to lead the Revlimid sales with $180 million followed by Cipla ($80 mn) and Zydus ($70 mn). 'While we expect 1 per cent Y-o-Y growth in US sales for our coverage universe, Zydus may post 4 per cent Y-o-Y growth due to incremental contribution from generic Myrbetriq, which can partially offset generic Revlimid price erosion. Lupin's US business is likely to grow 17 per cent Y-o-Y to $ 265mn due to the recent launch of Tolvaptan and stable market share in generic Spiriva,' Nuvama analysts said. Material new launches in the US remain limited. Phillip Capital said that while Indian drug companies will continue to see benefits from opportunities like generic Spiriva, Myrbetriq, Ustekinumab etc. in the US and Rupee depreciation, their US generics business is expected to see flat performance (2 per cent growth Y-o-Y) due to weaker generic Revlimid supplies and limited new launches. Sun Pharma's global specialty business is likely to post a robust showing in the first quarter while Cipla's US revenues are likely to remain flat sequentially at $220 million. Its market share in Lanreotide (for neuroendocrine tumours) has come down to 15 per cent, versus 20 per cent in Q1FY25, Nuvama said. Home turf On the domestic front, Torrent Pharmaceuticals, Sun Pharma and DRL tend to outperform in the first two months of Q1. The domestic pharma market has posted a 7 per cent steady growth with the cardiac, respiratory and neurological growth by 11.4 per cent, 9.5 per cent and 9.3 per cent Y-o-Y respectively. Oncology and cardiology are the two therapies that have registered double digit Y-o-Y growth. Nuvama estimated their coverage universe to report 10 per cent Y-o-Y domestic sales growth led by Torrent and Sun Pharma. Axis Securities Equity Research pointed out that on a sequential basis, however, the India business will see muted growth driven by sluggish performance in chronic therapies and a recovery in acute therapies. Axis expects some margin improvement (around 30 bps Y-o-Y) for most companies in its coverage, led by new launches, stable freight costs and decline in active pharmaceutical ingredients (API) prices, lower input costs and a better product mix towards niche launches. Healthcare segment In the healthcare segment, average revenue per occupied bed (ARPOB) is estimated to grow by 7-8 per cent Y-o-Y leading to revenue growth of 14-19 per cent Y-o-Y and 5-6 per cent quarter-on-quarter (Q-o-Q). Occupancies are also likely to improve by 100bps. Nuvama said that hospitals are on a steady footing in a seasonally soft quarter, barring Apollo Hospitals, which would see lower occupancy (down 300bps Y-o-Y) due to Bangladesh patients' impact. JM Financial said that despite Q1 being historically soft for the hospital sector, Q1FY26 is anticipated to demonstrate robust performance. 'The coverage universe is projected to achieve over 15 per cent Y-o-Y revenue growth and 21 per cent Ebitda growth. This strong performance is primarily driven by organic bed additions and improvement in ARPOB, further bolstered by the integration of new hospital facilities, notably by Max Healthcare and KIMS.' Meanwhile, Nuvama estimates Apollo revenue growth at 11 per cent, Fortis at 15 per cent, Jupiter 16 per cent. Analysts expect growth to recover strongly to 15 per cent Y-o-Y post-slowdown seen in last quarter. Vijaya remains one of the fastest growing (17 per cent Y-o-Y); Metropolis is likely to turn in a good recovery (13 per cent Y-o-Y organic). Dr Lal Pathlabs (up 11 per cent Y-o-Y) to report steady numbers while Agilus (5 per cent Y-o-Y) would remain soft. The sector margin to stay largely steady at around 28 per cent, said analysts.
&w=3840&q=100)
Business Standard
21-07-2025
- Business
- Business Standard
Revlimid erosion, slower domestic growth to weigh on Indian pharma Q1
The Indian pharmaceutical industry is expected to report a muted earnings performance for the June quarter, primarily due to declining sales of the blockbuster cancer drug generic Revlimid and subdued growth in domestic formulations. Analysts estimate year-on-year (YoY) revenue growth of 9 per cent, with profit after tax (PAT) growth in the range of 3–4 per cent. A stable pricing environment in the US generics market and rupee depreciation are expected to support double-digit revenue growth. However, pricing pressure on Revlimid is proving a major drag. Nuvama analysts expect US sales to post a modest 1 per cent YoY growth, constrained by continued price erosion in generic Revlimid. Some players, such as Lupin, will see US growth driven by sustained market share in products like generic Spiriva (a respiratory drug) and the launch of Tolvaptan (for kidney disorders). Aggregate margins for pharma companies in the Nuvama coverage universe are estimated to be around 26 per cent, down 32 basis points YoY, largely weighed down by price pressure on Revlimid. This trend is likely to impact the Q1FY26 performance of Aurobindo, Dr Reddy's Laboratories (DRL), Cipla and Zydus Lifesciences. Revlimid erosion remains key headwind Phillip Capital noted that DRL will continue to lead Revlimid sales with $180 million, followed by Cipla at $80 million and Zydus at $70 million. 'While we expect 1 per cent YoY growth in US sales for our coverage universe, Zydus may post 4 per cent YoY growth due to incremental contribution from generic Myrbetriq, which could partially offset Revlimid's erosion. Lupin's US business is likely to grow 17 per cent YoY to $265 million due to the recent launch of Tolvaptan and stable market share in generic Spiriva,' Nuvama analysts said. Material new launches in the US remain limited. Phillip Capital observed that while Indian drugmakers will continue to benefit from opportunities such as generic Spiriva, Myrbetriq and Ustekinumab, along with the rupee's depreciation, the US generics business is expected to post flat growth of around 2 per cent YoY due to weakening Revlimid supplies and few new launches. Sun Pharma's global specialty business is expected to post a strong Q1 performance, while Cipla's US revenue is likely to remain flat sequentially at $220 million. Its market share in Lanreotide (for neuroendocrine tumours) has declined to 15 per cent, from 20 per cent in Q1FY25, according to Nuvama. Domestic growth slows, chronic therapies drag On the domestic front, Torrent Pharmaceuticals, Sun Pharma and DRL tend to outperform in the first two months of Q1. The overall domestic pharma market has posted steady 7 per cent growth, with cardiac, respiratory and neurological therapies registering 11.4 per cent, 9.5 per cent and 9.3 per cent YoY growth, respectively. Oncology and cardiology were the two therapy areas that recorded double-digit growth. Nuvama estimates its coverage universe to report 10 per cent YoY growth in domestic sales, led by Torrent and Sun Pharma. However, Axis Securities Equity Research noted that sequentially, the India business is likely to see muted growth, weighed down by sluggish chronic therapy performance and only a modest recovery in acute therapies. Margins may see some tailwinds Axis Securities expects margin improvement of around 30 basis points YoY for most companies in its coverage, aided by new launches, stable freight costs, declining active pharmaceutical ingredient (API) prices, lower input costs and a shift in product mix towards niche products. Hospitals to deliver strong Q1 despite seasonality In the healthcare segment, average revenue per occupied bed (ARPOB) is expected to grow 7–8 per cent YoY, driving revenue growth of 14–19 per cent YoY and 5–6 per cent quarter-on-quarter (QoQ). Occupancy rates are also likely to improve by 100 basis points. Nuvama noted that hospitals are on solid ground in what is typically a seasonally soft quarter, barring Apollo Hospitals, which may see a 300 basis point YoY drop in occupancy due to reduced patient inflow from Bangladesh. JM Financial said that despite Q1 traditionally being weak for hospitals, Q1FY26 is anticipated to show strong performance. 'The coverage universe is projected to achieve over 15 per cent YoY revenue growth and 21 per cent EBITDA growth. This strong performance is primarily driven by organic bed additions and improvement in ARPOB, further bolstered by the integration of new hospital facilities, notably by Max Healthcare and KIMS.' Nuvama estimates Apollo's revenue growth at 11 per cent, Fortis at 15 per cent, and Jupiter at 16 per cent. Diagnostics show signs of recovery Analysts expect growth to recover strongly to 15 per cent YoY following the slowdown in the previous quarter. Vijaya remains one of the fastest-growing players with 17 per cent YoY growth. Metropolis is likely to post a healthy recovery at 13 per cent YoY (organic). Dr Lal PathLabs is expected to grow 11 per cent YoY, while Agilus may see softer growth of 5 per cent. The sector's margin is expected to remain steady at around 28 per cent, analysts added.
Mint
02-07-2025
- Business
- Mint
Stocks to buy: Lupin, Kalpataru Projects, Max Healthcare, among small-cap, mid-cap stock picks for July
For the month of July, Axis Securities has recommended a selection of mid-cap stocks including Lupin Ltd, Max Healthcare Institute Ltd, Colgate-Palmolive (India) Ltd, Prestige Estates Projects Ltd, and APL Apollo Tubes Ltd, along with small-cap stocks such as Sansera Engineering Ltd and Kalpataru Projects International Ltd. The brokerage is of the opinion that the Indian market began to recover from March 2025, evidenced by a 15% increase in the Nifty 50, and a rise of 25% and 29% in the Mid and Small-cap sectors respectively, since the lows recorded in February 2025. In the past month, the Small-cap index has appreciated by 5.7%, while the Mid-cap index has climbed by 4%, in contrast to the Nifty 50, which has seen a modest rise of 3.1%. Axis Securities believes that the risk-reward scenario is gradually favoring Mid and Small-cap stocks. However, the recovery is expected to be slow and steady as we approach FY26, driven by optimistic earnings projections, enhanced domestic liquidity, and stable macroeconomic conditions in India. In light of this situation, the brokerage continue to prioritize growth at a reasonable price, focusing on 'quality' stocks, monopolistic companies, market leaders in their fields, and sectors and stocks that are oriented towards the domestic market. The brokerage house anticipates that these may outperform the overall market in the near future. According to the brokerage, Lupin is optimistic about its growth trajectory, bolstered by robust new product launches, an expanding portfolio of complex generics, and a strong pipeline. In the US market, the recently introduced Darunavir and Spiriva have captured market shares of 30% and 25%, respectively. The recently launched Tolvaptan (with a market size of $287 million) and Xyway (with a market size of $958 million and 180-day exclusivity) are anticipated to add to revenue in the first half of the year. As per the brokerage, Max Healthcare maintains a balanced revenue mix, with consistent growth observed in both its institutional and international patient segments. The recent increase in the share of institutional business is anticipated to stabilise as more higher-value payer segments develop. Although the launch of new hospitals might initially impact margins, this effect should diminish as these facilities enhance their operational capabilities. Profitability in Lucknow and Nagpur is projected to further improve, supported by rising occupancy rates and the rollout of new clinical programs. The brokerage expressed its appreciation for the company's overarching long-term strategy, which aims to drive revenue growth through several initiatives: 1) Introducing premium science-based products to improve overall realizations, 2) Building the category by boosting awareness through marketing efforts, 3) Enhancing the frequency of consumption and penetration in rural areas, and 4) Broadening the personal care lineup to reduce risks linked to the sluggish growth in the oral care segment. Furthermore, the demand landscape is expected to improve in the upcoming quarters, and the recent decline in stock prices offers a better margin of safety. As a result, they continue to uphold their BUY rating with a new target price of ₹ 2,830/share. Top picks stocks for July Based on brokerage insights, following a lackluster performance in 9MFY25, PEPL's pre-sales surged in Q4FY25, totaling ₹ 6,957 Cr (+48% YoY), fueled by an increase in property launches (14 Mn sq. ft.). The growth primarily resulted from price increases, with additional support from a stronger regional contribution. However, despite this recovery, FY25 pre-sales fell 19% YoY due to postponed launches linked to regulatory challenges, leading to a ~30% shortfall compared to the initial target of ~ ₹ 24,000 Cr. Looking ahead to FY26E, Prestige plans to counter the subdued FY25 results with an extensive launch pipeline valued at ₹ 42,000 Cr. Along with an existing inventory valued at ₹ 21,000 Cr, we believe Prestige is well-equipped to achieve a 65% YoY increase in pre-sales, reaching ₹ 28,000 Cr. As per the brokerage's analysis, the firm aims to increase its capacity to 10 MTPA by FY30, offering a favorable growth opportunity in the long term. We uphold our target price of ₹ 2,035 per share. The stock is currently priced at a 12-month forward price-to-earnings ratio of 38x. The brokerage assesses it with a 12-month forward target multiple of 35x based on our estimated EPS for FY27. As per the brokerage, the firm is poised to take advantage of a strong order backlog, favorable trends in both the domestic and international Transmission & Distribution (T&D) and Building & Factory (B&F) sectors, enhanced performance from its overseas subsidiaries, favorable government policies, and anticipated improvements in margins. It is expected to achieve a compound annual growth rate (CAGR) of 18%/22%/41% for the period from FY25 to FY27E. Based on the brokerage's analysis, considering factors such as a) a larger proportion of sales in Non-Automotive ICE components, b) a rising trend toward premium products, c) a dedicated focus on enhancing margin performance, d) a strong capability to generate operating cash flow, and e) plans for capacity expansion, we anticipate that Revenue, EBITDA, and PAT will experience a CAGR of 17%, 21%, and 30%, respectively, from FY25 to FY27E. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
