The Indian pharma market continued its strong performance owing to a jump in revenue from the domestic market and new product launches.
"The domestic market contribution increased from 30% to 32% of revenues in Q2 of FY13. The domestic Indian Pharma market continued its strong performance owing to the new product launches," Barclays Equity Research analyst Rohit Goel said in a report here.
Owing to strong high-teen growth levels in the domestic market, the share has gone up to 32% at Rs 15,394.9 crore in Q2 FY 12.
Domestic formulation growth at 18% year-on-year is slightly ahead of our expectations of mid-teen growth levels from India. This compares favorably with the 15% growth last year. Acute therapeutic segments grew by 11.7.2%, while chronic segment grew by 20.3%, the report said.
Operating margins continued to improve both sequentially (60bps) and on a y/y basis (280 bps), reaffirming Indian pharma's steady operating fundamentals.
The gain in the US market share and forex aid 55% growth. The US formulations growth at 55% as against 33% in 2Q FY12 were driven by multiple major launches and were further accentuated by a 20% depreciation yoy, Goel said.
For 2Q FY13, forex gains have contributed significantly to support Cipla's and Ranbaxy's bottom-lines resulting in PAT-level individual outperformance despite overall sets of weak results. However, PAT for our coverage was 8% below our expectations because of the Rs 5.8 bn one-off provisioning taken by Sun Pharma, the report said.
Key one-offs that are unlikely to recur next year are revenues from Lexapro for Cipla, Lipodox for Sun Pharma and Lipitor to a smaller extent for Ranbaxy. Biochem acquisition (18% growth for Cadila without Biochem) also helped the strong growth trajectory.