The drug major is likely to report a 1.1% year-on-year (YoY) drop in consolidated net profit to Rs 1,247 crore, according to the average of estimates given by seven brokerage firms.

Consolidated revenue is seen rising 1.6% YoY to Rs 6,877 crore, while operating profit may fall by nearly 8% to Rs 1,898 crore, the estimates showed.

The Hyderabad-headquartered company is scheduled to release its quarterly earnings on Tuesday.

Here’s summarising analysts’ expectations from the drugmaker for the third quarter:

Kotak Institutional Equities

We expect North America base business (ex-Revlimid) sales to remain flat QoQ at $293 million, led by the ramp-up of gNuvaring, gAmitiza, gVascepa, and gRemodulin, offset by lower market share in gKuvan and gSuboxone.In our estimates, we factor in $110 million of gRevlimid sales in the US in 3QFY24, higher than $95 million in 2QFY24.

Within the base business, we bake in $27 million sales from the Mayne portfolio, higher than $25 million in 2QFY24. We expect domestic sales to grow 8% YoY in Q3 FY24.We expect 16% YoY growth in Europe and 4% QoQ growth in Russia.

The PSAI segment is likely to recover and we factor in a 14% sequential growth. Overall, we expect sales to grow 7% YoY (5% QoQ) in Q3.

Amid continued raw material inflation, being partially offset by higher gRevlimid sales, we expect a sequential decline in gross margin of 40 bps to 58.3%. We expect consolidated EBITDA to grow 2% YoY to Rs 21 billion, with the EBITDA margin expanding 10 bps QoQ to 29.1%.

Nuvama Institutional Equities

North America revenue at $425 million, up 11% QoQ, assuming high gRevlimid sales, an uptick in gRemodulin share (3.5% from 0.3% in Aug’23), stable share in gVascepa, gSuboxone, partly offset by high single-digit price erosion.

India (mere +7% YoY) due to weak acute season and lost sales from divested brands. EBITDA margin at ~30%, +100 bps QoQ due to higher expected gRevlimid sales.

PhillipCapital

We estimate a 2% fall in revenue on account of a 4% decline in US sales, caused by lower Revlimid contribution (at $117 million vs $140 million last year) and the modest rise in domestic formulations sales (+3% YoY).

Margins to correct 140 bps QoQ/210 bps YoY, mainly due to lower gRevlimid sales and product mix, leading to an 8% fall in EBITDA.

With the lower benefit of gRevlimid, the resultant PAT may fall by 6% YoY.

Motilal Oswal Securities

US sales may grow 4% YoY to $384 million due to steady traction in existing products and continued price erosion. Update on filings, approvals, and launches in China.

India revenue to grow 6% YoY; Strong traction in respiratory to be offset by double-digit decline in cardiac therapy.
Watch out for key approvals and launches in NA over the next 12-15 months to drive growth beyond g-Revlimid.

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