Indian pharmaceutical companies’ 3Q profitability improvement starts to taper off: Ind-Ra

18 Feb 2021 Evaluate

India Ratings and Research (Ind-Ra) has said that it does not expect Indian pharmaceutical companies to sustain the healthy operating margins reported during 3Q FY21 and 9M FY21. It mentioned that the India formulations business grew year-on-year (yoy) during 3Q FY21 and 9M FY21 while growth across other segments was lower both on quarter-on-quarter (qoq) and yoy basisIt witnessed stable EBITDA margins on a quarterly basis as revenue increase gained momentum in India formulations business, attributed to Covid-19 related products while product launches aided the US business' margins. It highlighted the EBITDA margins expanded around 300 basis points yoy during 3Q while they have started tapering off on a qoq basis due to elevated operating expenses as cost savings in lieu of the digital initiatives undertaken during 1H FY21 have not been sustainable.

The healthy performance during 3Q FY21 is attributed to improving revenue growth in key geographies of India and the United States with cost optimisation initiatives continuing albeit with lower intensity. The India business growth was led by the increased number of prescriber interactions with patients and increased sales and marketing activities by pharmaceutical companies with unlocking and higher sales of Covid related products. Growth was also led by continued outperformance of chronic therapies. The higher growth witnessed in other segments (US, API, RoW) during 2Q FY21 has started normalising due to increasing competitive intensity with the unlocking of economic activities. While currency depreciation impacted growth in key RoW markets (Brazil, Russia), API business has started normalising with lower pricing and pre-buying benefits.

As the unlock phase gains momentum due to vaccinations, it expects India business to revert to its historical growth of 8 to 10 per cent over the medium to long term while the US generic business to see a 4 to 5 per cent annualised price deflation. It also expects the RoW markets to witness volume growth in double digits as the vaccination drive accelerates in these markets. The analysis is based on the reported segmental results of 13 large pharma companies.

Create stable, long-term investment portfolio with strong, consistent stocks.

Start Research-backed Investing ...Now. Subscribe to Sapphire

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Fiduciary-first advisory model.
As SEBI-registered IAs, we are legally and ethically bound to act in the best interests of our clients. We do not sell or distribute any financial products. This ensures our guidance is 100% unbiased and conflict-free.
Deep fundamental research + robust valuation discipline.
Built on more than 15 years of equity research, our framework combines quality assessment, intrinsic value estimation, and a sensible margin-of-safety approach.
Process—not predictions.
We don’t rely on guesswork or market timing. Instead, we focus on asset allocation, risk management, and long-term compounding.
Technology + Human Intelligence.
We believe a combination of both is essential for investing success. We constantly innovate and upgrade in-house tools, financial X-rays, and portfolio analytics so that our team of analysts and advisors are equipped with the best.
Partner with Clients.
We follow a DIWM (Do-It-With-Me) approach where we partner clients in setting goals, financial planning, educating on our investing process and share decision-enabling resources transparently with our clients who retain control on execution.

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

Investing in stocks, mutual funds, debt, and gold
Quality-at-Reasonable-Price way of investing in stocks
Constructing Direct Stock Portfolios with Core, Booster, and Amplifier stocks
A Mutual Fund Portfolio that delivers consistent out-performance and meaningful diversification (low overlap)
Periodic review and rebalancing
Clear Buy-Sell-Hold, and Position-sizing frameworks

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
Logo:
Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
Brand Logo:
SEBI Registration Number:	INA000013323 Validity – May 16, 2019 – Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.