From the pharmaceutical space, Dr Reddys Laboratories (DRL) reported a mixed set of earnings this quarter. In an interview to CNBC-TV18, Saumen Chakraborty, CFO of DRL discussed the company's Q3 performance.
As Indian drug makers brace up to report their third quarter earnings in the days ahead, analysts predict Q3 FY18 to be mixed bag with revenues expected to remain flat on year-on-year basis, though on sequential basis things may look much better.
The USFDA granted 246 nods in Q3FY18, which is the highest-ever approvals in a single quarter. Cadila Healthcare received 23 and Aurobindo Pharma got 18 approvals.
Consolidated revenue during the quarter is seen rising 3 percent year-on-year to Rs 3,684 crore due to restocking post GST, according to average of estimates of analysts polled by CNBC-TV18.
Net Sales are expected to increase by 5.6 percent Y-o-Y (up 14.2 percent Q-o-Q) to Rs. 3787.8 crore, according to Kotak.
Expectations were running low on account of pre-GST implementation adjustments in the quarter, and overall, the Nifty earnings have not resulted in any incremental negative surprise.
In an interview to CNBC-TV18, Amey Chalke of HDFC Securities spoke about Q1 FY18 earnings from pharma sector.
Revenue is seen rising 4.6 percent year-on-year to Rs 3,383 crore in June quarter, according to average of estimates of analysts polled by CNBC-TV18.
In an interview to CNBC-TV18, Chander Agarwal, MD & CEO, TCI Express spoke about the results and his outlook for the company.
Brokerages largely remain optimistic about the pharma major’s improvement in US business as well as reduced regulatory risks, while some also highlight the seriousness of US FDA’s observations at some of its plants.
Revenue during the quarter may fall 2 percent year-on-year to Rs 3,680 crore due to lower US growth.
Net Sales are expected to increase by 2.5 percent Q-o-Q (up 1.2 percent Y-o-Y) to Rs 3800.9 crore, according to ICICI Securities. Dr. Reddy’s to report net profit at 3800.9 crore up 1.2% quarter-on-quarter.
Surajit Pal, Research Analyst at Prabhudas Lilladher, said the pharma sector is undergoing a transition and all the large midcaps will underperform.
The pharma major reported third quarter earnings on Saturday. While revenues declined, the drop was in-line with expectations and was overall an operationally strong quarter.
US business is likely to be sluggish due to lack of quality approvals during the quarter and increasing competition in key drugs such as Dacogen, Valcyte and Vidaza generic.
Net Sales are expected to increase by 4.6 percent Q-o-Q (down 5.4 percent Y-o-Y) to Rs 3750 crore, according to HDFC Securities.
Net Sales are expected to increase by 7.4 percent Q-o-Q (down 2.9 percent Y-o-Y) to Rs 3851.4 crore, according to ICICI Securities.
Net Sales are expected to increase by 0.4 percent Q-o-Q (down 8.5 percent Y-o-Y) to Rs 3632 crore, according to KR Choksey.
The earning numbers a mostly in line with estimates and Angel Broking keeps a neutral rating on the stock, says Sarabjit Kour Nangra of Angel Broking.
Performance of Dr Reddy's Laboratories in July-September quarter is expected to be weak as profit is likely to plunge 59 percent year-on-year to Rs 298 crore on poor operational performance.
Net Sales are expected to increase by 2.9 percent Q-o-Q (down 16.9 percent Y-o-Y) to Rs 3316 crore, according to Centrum.
Domestic pharmaceutical companies are likely to report subdued sales, EBITDA and PAT figures in the second quarter of this fiscal, even as the formulations business may see a strong recovery, Reliance Securities said in its report.
The fall in revenue and profits in the first quarter was due to lack of launches in the US, says Saumen Chakraborty, CFO of Dr Reddy‘s. The company launched its first product in the US in July.
For the first quarter ended June, Dr Reddy‘s Laboratories missed estimates on all counts. Revenue declined 14 percent to Rs 3,222.5 crore in the quarter ended June 2016 from Rs 3,752.2 crore in same period last year.
Shetty says that she has her doubts on a possible revival of revenues saying that the eight drugs bought from Teva for the US market, will take till 2019 to affect Dr Reddy's revenues.