Essentials tag unlikely to benefit pharmaceutical companies in Q1

Channel stocking in US in March quarter, lockdown impact hint at drop in earnings

The June quarter is unlikely to be a healthy one for pharma companies, despite medicines being on the essential commodities list. Domestic sales for April and May indicate the pharma market declined 11 per cent and 9 per cent, respectively, before registering some recovery in June. The closure of out-patient departments (OPDs) and deferral of elective surgeries translated into muted prescription flow and sales.

Companies, such as Cadila Healthcare, Cipla and Alkem, which have a higher share of domestic sales in their portfolio, will face more heat, say analysts. Surya Patra at PhillipCapital expects domestic pharma revenues of companies to be