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India Strategy 1QFY25 preview report-Healthcare, MOSFL

The India Strategy April-June 2024 preview report by MOSFL expects the healthcare companies under our coverage are expected to report healthy YoY earnings growth of 21% in 1QFY25. We expect aggregate sales to grow by 11% YoY to INR763b, aided by solid traction in Domestic formulation (DF) sales and healthy performance in the US segment. EBITDA is likely to exhibit a 15% YoY growth to INR179b, led by a higher share of niche launches in the US generics. PAT is expected to grow by 21% YoY to INR111b. For hospitals, we expect profitability to improve due to the addition of beds, an increase in occupancy, and optimizing the case mix/payor mix.

The Healthcare Universe is likely to report sales/EBITDA/PAT growth of 12%/ 17%/ 21% YoY in 1QFY25. We expect aggregate DF segment sales to grow 10% YoY to INR194b in 1QFY25 for the companies under our coverage. This will be propelled by healthy growth in cardiac, gastro, and dermatologic therapies that have grown more than IPM for the quarter.

MOSFL is raising Healthcare to OW from Neutral. We are replacing Cipla with Mankind Pharma in the portfolio. Mankind Pharma is not only enhancing the niche portfolio but also improving its chronic share, thereby driving a 15% earnings CAGR over FY24-26. Surplus cash provides increased scope for growth through inorganic opportunities. We remain constructive in the hospital sector and have now switched from Global Health to Max Healthcare. After delivering 33% EBITDA CAGR over FY20-24, Max Healthcare is well-placed to deliver 19% EBITDA CAGR over FY24-26 backed by the scale-up of the recently acquired Sahara Hospital (Lucknow), Alexis Hospital (Nagpur), and the addition of beds at its existing sites,” says the report.

For report, click.
MB Bureau

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