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Stocks of major pharmaceutical companies are seen trading with a positive bias next week as we expect pharma sector to report healthy margins and high revenues for Oct- Dec Growth momentum of pharma companies in Oct-Dec is seen sustaining with core sales rising 26%, earnings before interest, tax, depreciation and amortisation increasing 37% and net profit growing 40%. Strong ramp-up in Vidaza, Dacogen and other limited-competition products should drive 49% PAT (profit after tax) growth for Dr Reddy while Sun Pharma will continue to benefit from Doxil, Doxycycline and the exclusivity of Prandin and Cymbalta. The revival in domestic formulation segment and continuing growth in US generics will be the key highlights for Oct-Dec, leading to average 27% growth in revenues of pharma companies. Margins are expected to remain strong backed by favourable currency and limited competition launches in US. In Oct-Dec quarter, the rupee has depreciated over 14% year-on-year against the dollar. While Aurobindo Pharma and Dr Reddy's Laboratories are likely to witness margin expansion of around 500 basis points, Biocon, Torrent Pharma and Ipca Laboratories are seen posting around 200 bps margin growth in Oct-Dec. Bengaluru-based Biocon Ltd will report its quarterly results Wednesday and we expects the company to post 20% higher sales in Oct-Dec. Net profit of the company is seen rising 19.5% on year to 1.09 bln rupees. Among all pharma stocks, Sun Pharmaceuticals Industries would "positively surprise" in Oct-Dec with likely 52% sales growth and 54% rise in net profit.
Stocks of major pharmaceutical companies are seen trading with a positive bias next week as we expect pharma sector to report healthy margins and high revenues for Oct- Dec Growth momentum of pharma companies in Oct-Dec is seen sustaining with core sales rising 26%, earnings before interest, tax, depreciation and amortisation increasing 37% and net profit growing 40%. Strong ramp-up in Vidaza, Dacogen and other limited-competition products should drive 49% PAT (profit after tax) growth for Dr Reddy while Sun Pharma will continue to benefit from Doxil, Doxycycline and the exclusivity of Prandin and Cymbalta. The revival in domestic formulation segment and continuing growth in US generics will be the key highlights for Oct-Dec, leading to average 27% growth in revenues of pharma companies. Margins are expected to remain strong backed by favourable currency and limited competition launches in US. In Oct-Dec quarter, the rupee has depreciated over 14% year-on-year against the dollar. While Aurobindo Pharma and Dr Reddy's Laboratories are likely to witness margin expansion of around 500 basis points, Biocon, Torrent Pharma and Ipca Laboratories are seen posting around 200 bps margin growth in Oct-Dec. Bengaluru-based Biocon Ltd will report its quarterly results Wednesday and we expects the company to post 20% higher sales in Oct-Dec. Net profit of the company is seen rising 19.5% on year to 1.09 bln rupees. Among all pharma stocks, Sun Pharmaceuticals Industries would "positively surprise" in Oct-Dec with likely 52% sales growth and 54% rise in net profit.
