Motilal Oswal: Pharma Sector Q2 Earnings Preview - Sales Growth Yet To Pick Up Meaningfully

India’s pharma industry is likely to sustain year-on-year earnings growth momentum in Q2 FY21—albeit at a slower rate sequentially

Tablets sit illuminated during the film-coating process in the laboratories (Photographer Krisztian Bocsi/Bloomberg)

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Motilal Oswal Report

Following a strong performance in Q1 FY21, we expect YoY earnings growth momentum to sustain in Q2 FY21 as well, albeit at slower rate versus Q1 FY21.

We expect sales to grow at a subdued rate of 6.4% YoY, and Ebitda/profit after tax at 18.3%/18.1% YoY on an aggregate basis for the quarter.

Structural cost savings are expected on account of travelling/admin cost related to marketing and a calibrated increase in other cost factors.

This is expected to maintain QoQ profitability at the aggregate level for companies under our coverage.

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Motilal Oswal Pharma Sector Result Preview.pdf
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