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Stocks of major pharmaceutical companies are seen taking cues from the broad market next week, with the focus mainly on shares of Pfizer India Ltd that will detail its Jan-Mar earnings Friday. GlaxoSmithKline Pharma Ltd and Dr Reddy's Laboratories, which would report their quarterly earnings on May 7 and May 14, respectively, would also be closely tracked by investors. Pfizer India is likely to report comparatively lower growth in Jan-Mar primarily on account of continuing pressure on its key value brands.
Excluding its divested animal health business, on a comparable basis, we expect just 3% on year revenue growth in 4QFY13 (Jan-Mar). EBITDA margin is expected to improve 870bps yoy to 20.5%, chiefly on account of a very low base in 4QFY12 and higher proportion of domestic branded formulations revenue. Despite the animal health divestment, we expect its adjusted PAT (profit after tax) to grow 27.5% yoy due to its expanded margin and higher other income.
We expects GlaxoSmithKline Pharma's revenue to grow 16% on year on a lower base. We also expects Dr Reddy's Laboratories to record a strong quarter with margins improving on high US sales. In Jan-Mar, revenues of major pharmaceutical companies are seen growing around 20% and operating margin by 25%, pharmaceutical companies would thrive on factors such as US sales led by exclusivities, new launches, strong growth in domestic formulation business, and continuing traction in other emerging markets.
