Expect mixed numbers as export opportunities were fewer

PHARMACEUTICALS

Pharmaceutical companies are expected to post moderate growth in the March 2008 quarter. That's because exports will be impacted to some extent by the appreciation of the rupee.

Moreover, competition in the US generics market has been keen and there has been a lack of opportunities for firms to launch generics products.

While top generics firms like Ranbaxy Laboratories and Dr Reddy's Laboratories could see revenues remaining flat or falling marginally, others are expected to register a 25 per cent growth in their top line.

Price erosion in the US market, for drugs going off-patent, has impacted the US sales of most Indian companies. Companies such as Ranbaxy and Dr Reddy's had reaped huge benefits in 2007 from authorised generics and marketing drugs exclusively for some periods.

However, this time around Dr Reddy's 4QFY08 sales could fall , mainly due to the absence of a one-time exclusivity revenue from Ondansetron, which contributed about Rs 270 crore to 4QFY07 sales. 
 

(Rs crore) Company	Net sales			Operating profit			Profit after tax
	Q4FY08 (E)	Q4FY07	% change	Q4FY08 (E)	Q4FY07	% change	Q4FY08 (E)	Q4FY07	% change
Cipla	953	932	2.3	208.2	145.9	42.7	142.2	143.1	-0.6
Dr Reddy's	1,175	1,557	-24.5	117.0	547.0	-78.6	91.5	325.3	-71.9
Sun Pharma	681	531	28.2	298.4	154.5	48.2	228.2	212.2	7.5
Wockhardt (Q1)	795	523	52.0	183.5	115.9	58.3	79.9	55.2	44.7

Ranbaxy's revenues are expected to come primarily from higher growth in semi-regulated markets and new drug launches in the US.

Sun Pharma, powered by the upside from launch of generic Protonix tablets and Glenmark Pharma, for which it received milestone payments from Forest Laboratories, is also expected to perform well during the quarter.

New drug launches and consolidation of Negma Laboratories acquisition are likely to help Wockhardt post better results.

The performance of multinational companies is likely to be somewhat subdued. The sale of the fine chemicals business for GSK Pharma and lower sales of Rabipur and Soframycin for Aventis will reflect lower growth in the quarter.