Key Points
The operating profit margin (OPM) for the sample set is projected to improve to 22-23% in FY24, against 20.7% in FY2023, supported by new product launches backed by increased focus on complex generics, specialty drugs, easing of pricing pressure, and some benefits of volume expansion and better pricing due to product shortages in the US market...
ICRA expects the overall credit profile of the Indian pharmaceutical companies to remain healthy, supported by their stable earnings profile, comfortable leverage and coverage metrics, and strong liquidity position, in spite of the credit risk arising from any adverse regulatory actions...
However, the share of revenues from the US market for ICRAs sample set of companies declined to 35% in FY22 compared to 40% in FY20 owing to consistent pricing pressure, lack of major blockbuster products going off-patent and increased regulatory scrutiny in the recent years...
With easing of pricing pressure, significant new launches and shortages of some products, the same increased to 37% in FY2023 and 38% in the first half of FY24, ICRA report said.. Apart from some key drugs going off-patent, product shortages in select therapeutic segments such as oncology, anesthesia, cardiovascular among others in the recent quarters have also been a growth driver for generic companies in the US market to some extent," said Deepak Jotwani, assistant vice president & sector head, ICRA...
The revenue growth of the sample set of companies in the European market has picked up considerably in the current fiscal, largely on the back of a low base, uptick in the base business (both branded and generics segment), new product launches (especially injectables) and incremental revenues from new tender wins in countries such as Germany in addition to 8.8% depreciation of the Indian Rupee against the Euro in nine months ending December 31, 2023...
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