Pharmaceutical companies in India are expected to experience slower profit growth in the October-December 2024 quarter compared to the previous two quarters. According to analysts, sales growth is projected to be around 10-12% and earnings before interest, taxes, depreciation, and amortisation (EBITDA) growth of 13-15%. The growth momentum is expected to slow down due to pricing pressures and a high base effect.

Large companies such as Dr Reddy’s Laboratories (DRL) and Sun Pharma are expected to contribute to the sales growth, with DRL projected to achieve over 10% growth in its India business. Mid-sized companies like JB Pharma, Torrent Pharma, and Mankind Pharma are likely to outperform with 11-13% year-on-year (YoY) growth, driven by their chronic portfolios.

In contrast, Cipla and Zydus are expected to report relatively weaker growth of 6-8% YoY due to supply constraints and base effects. The US generics segment is projected to remain flat due to price erosion and limited significant launches.

Overall, EBITDA is expected to grow by up to 15% YoY, but margins are expected to remain flat. Cipla and DRL are likely to face margin contraction, while Sun Pharma, Lupin, and Divi’s Laboratories are expected to report strong margin expansion.

The performance of key pharma players will be closely monitored by investors, particularly with respect to their outlook and commentary on margins. Updates on DRL approval timelines for large products in the US, Biocon’s outlook following the clearance of its facilities for biosimilars, and Aurobindo Pharma’s progress towards breakeven for its Penicillin G capacity will also be crucial.