Pharma companies are unlikely to sustain the healthy operating performance reported in the first quarter as they will lose the margins booked during the global lockdowns, says a report. The pharma companies cumulatively saw their pre-tax margins rising by 306 basis points (bps) on an annualised basis and 551 bps sequentially in the first quarter due to better prices and lower expenses both due to the lockdowns, according to a report by India Ratings on Monday. The US is the single largest market for the domestic companies with 36 per cent of the revenue share followed by the domestic market at 31 per cent. While 16 per cent of their revenue comes from active pharmaceutical ingredients (APIs).”We do not expect domestic pharma companies to sustain the healthy operating performance reported in Q1 because with global unlocking, both operational expenses and active pharmaceutical ingredient (API) prices will normalise, leading to lower margins, the report said.

(Economic Times)