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Stocks of major pharmaceutical companies are mostly seen in a range next week, with stock-specific movement likely in companies detailing Jan-Mar earnings. Dr Reddy's Laboratories, Elder Pharmaceuticals, and Orchid Chemicals and Pharmaceuticals will detail their earnings this week. Dr Reddy's is now consistently outperforming industry, as key segments, including CVS, anti-infectives and pain management, outpaced market in March. Despite a relative underperformance of Top 10 brands (grew 2.5%), overall growth has been at 10%, which indicates better traction in new brands. Dr Reddy's focus on improving field productivity in the previous financial year is yielding results and would drive the company's earnings this quarter.
We expect another strong quarter for Indian Pharma, driven by strong revenue growth, better mix (higher US revenues) and favourable currency. Adjusted for large exclusivities in the base, we expects the Indian pharmaceutical space to report 17%, 23% and 24% on year growth in revenues; earnings before interest, tax, depreciation and amortisation; adjusted net profit, respectively. Sun Pharma, Aurobindo, Dr Reddy's and Lupin could surprise positively while Ranbaxy, Biocon, Cipla & Cadila may post weak numbers.
