Q2 report card: Pharma sector posts encouraging numbers

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Q2 report card: Pharma sector posts encouraging numbers

After a sluggish first quarter, pharma universe reported some encouraging numbers in the second quarter. This is with some support from stable growth in certain geographies but inflationary pressures taking a test on the other hand report CNBC-TV18's Archana Shukla.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show » ALSO READ News and Notices about Lupin See interviews with Lupin Management See what other Experts & Brokerages are saying about Lupin See previous Results of Lupin

After a sluggish first quarter, pharma universe reported some encouraging numbers in the second quarter. This is with some support from stable growth in certain geographies but inflationary pressures taking a test on the other hand report CNBC-TV18's Archana Shukla.

Pharma companies have turned in a mixed quarterly performance. Some largecap companies overcame rising input costs to post strong growth numbers.

Kamal K Sharma, MD, Lupin says, "There were some pressures on input costs but we managed to overcome them."

But others, like Ranbaxy which turned in its biggest loss in 10 quarters, were not so lucky especially when forex losses came into play.

Glenn Saldanha, MD and CEO, Glenmark , "Non cash forex loss played heavily on numbers. base business still strong." Most companies saw strong growth in international markets, especially key geographies like the US.

Many emerging markets also chipped in, with an average 24% growth. And players are confident this growth will improve in coming quarters. They also believe the business restructuring that many companies like Dr Reddy's have implemented in Europe will also bear fruit soon.

GV Prasad, Vice Chairman and CEO, Dr Reddy's Lab said, "We hope to see those results the balance portion for the year. We are already seeing early signals of recoveries and I think third quarter will be better than Q2."

The only dampener has been a slowdown in the domestic market, especially in the anti-infectives segment. And while most companies feel things will turn around here as well, analysts warn that the industry still has to deal with the new drug pricing policy that will rear its head in the among quarters, not to mention inflationary pressures and any MTM losses on account of currency fluctuation.