IDirect Pharma Q4FY22 result preview

The I-direct Pharma universe witnessed a mixed quarter with the phase of smooth going in the first half (decent domestic traction, normalising scenario on input cost inflation and logistics) almost undone by headwinds such as Russia-Ukraine crisis and Covid wave in China. The universe (12 coverage companies) is expected to post YoY growth of ~7% to ~| 44,593 crore.

Domestic formulations (select pack) are expected to grow ~11% YoY to | 10,609 crore on the back of 1) price hikes, 2) continued traction for acute therapies being supplemented by pick-up in chronic demand and 3) a small bump in Covid induced sales.

On the US front, we model high single digit price erosion in US generics besides negative USFDA compliance outcomes for Zydus (Jarod), Aurobindo Pharma (Unit-I), Biocon Insulin Aspart CRL, Lupin (New Jersey) to continue to weigh on US pack. These aspects are likely to outweigh approvals traction such as Lacosamide for Alembic, Dapagliflozin for Zydus, Vasostrict for Dr Roddy’s, Vigabatrin and Efinaconazole for Lupin. The US (select pack) portfolio is expected to grow ~5% YoY to | 12,788 crore.

Europe (select pack) is expected to grow ~3% YoY to | 2,769 crore, as we expect a delay in pick-up in demand being exaggerated by logistical challenges arising out of geo-political tensions in Europe. API segment (select pack) is likely to de-grow ~3% YoY to | 4,693 crore amid gradual pickup in demand as we forecast inventory destocking to decrease.

On the company’s front, Divi’s Lab, Biocon, Ipca and Sun Pharma are likely to report 10%+ YoY growth.

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MB Bureau