Pharma Sector Q4 Result Preview: Companies likely to do well in fourth quarter, say analysts

Pharma Sector Q4 Preview: Pharma companies are likely to announce their quarterly results from Wednesday onwards and analysts expect that there will be growth ranging from 11-12 per cent in their overall income. As per the brokerage reports and analysts, growth is expected in both US and domestic businesses.

As per analysts' prediction, more growth is expected from American companies in the domestic formulation. Some of the major factors that will contribute to the growth in the pharma sector include new launches of various products and favorable currency changes. Margins are expected to improve on better product mix and price hikes.

Brokerage reports have pointed out that the March quarter has remained a bit sluggish for hospitals and other medical outlets too. The occupancy in hospitals remained low in the March quarter, thus there was some slowdown in the sector's growth.

OPD volumes are likely to remain higher due to volatility in seasonality. When it comes to the US markets, analysts and brokerages expect continued price erosion and mid-to-high single digits on a year-on-year (YoY) basis. One of the major reasons that the margins for pharma companies could remain flattish, despite better growth as compared to the previous quarter, is due to the account of continued elevated cost base as well as price erosion in the USA.

In a stern action against the manufacturers of substandard drugs, central and state regulators have come down heavily - conducting joint inspections at 76 pharmaceutical companies, and on March 28, canceled the licences of 18 of them for producing spurious and adulterated drugs.

However, shares of TTK Healthcare – a diversified pharma company – touched a new all-time high of Rs 1,474 per share last week, after surging more than 17 per cent on the NSE during the trading session after the company announced its plan to delist shares from the market voluntarily.