A report compiled by Fortune Equity Brokers (India) has stated that pharmaceutical companies have posted mixed performance in Q4FY13, however, most of them posted sequential improvement in margins. Excluding Ranbaxy (Lipitor exclusivity last year), the growth was higher at 23.4 per cent Y-o-Y primarily led by US formulations business. Coverage Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) (excl Ranbaxy) improved by a staggering 32.9 per cent Y-o-Y.
Sequential improvement in EBITDA margin was seen in most companies under coverage as Q3FY13 was marred by several one-off costs. APAT grew better than EBITDA principally led by lower tax rates (Sun and Cadila) and reduction in interest costs. Sun Pharma, Lupin, Glenmark and Aurobindo were the outperformers during the quarter.
The US continue to be chief growth driver. Driven by series of Abbreviated New Drug Application (ANDA) launches in the US, acquisitions and favourable exchange rate, most companies posted excellent growth in their US operations. Growth was robust even in USD terms. The performance of Sun Pharma, Aurobindo and Lupin was the most notable as they posted robust 76.9 per cent Y-o-Y, 61.5 per cent Y-o-Y and 48.9 per cent Y-o-Y growth in the US. Sun’s growth was primarily driven by integration of Dusa and URL coupled with the launch of Lipodox.
Aurobindo and Lupin’s growth was driven by series of ANDA launches in US during FY13 and a favourable season. DRL continues to do well in the US growing at 30.7 per cent Y-o-Y. Ranbaxy’s sales dropped by 70.4 per cent Y-o-Y from the high base set up by Lipitor exclusivity. Cadila’s performance should improve going ahead with launch of more ANDAs in niche segments. FY13 has been a very good year for Indian Pharma companies in US driven by close to $30 billion of drugs that went off patent in 2012. We expect the growth to remain robust in FY14 too led by limited competition launches and favourable exchange rate.
The domestic market, however, witnessed a slowdown and grew by only 7.8 per cent Y-o-Y in Q4FY13. Despite this, most pharma companies under our coverage posted higher-than-market growth, the most notable being Lupin (42.7 per cent Y-o-Y growth), Glenmark (32.4 per cent Y-o-Y growth) and Unichem (27.8 per cent Y-o-Y growth). Sun felt the high base of Q4FY12 and posted a contraction of 11.1 per cent YoY in revenues. Cipla’s performance was also disappointing as they grew only by 5.2 per cent Y-o-Y.
EP News Bureau – Mumbai
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