Indian pharma margins hit by West Asia conflict costs
Indian pharma companies are feeling the heat as the West Asia conflict drives up shipping and raw material costs.
Dr. Reddy's Laboratories saw its profit margins dip, with CFO M. V. Narasimham pointing to pricier transportation and solvents as the main culprits.
The higher freight charges also pushed up administrative expenses, while solvent costs weighed on gross margins.
Cipla EBITDA 16.7% amid war-related costs
Cipla is in the same boat, facing "certain war-related costs" that have pushed its EBITDA margin down to 16.7% this quarter.
CEO Achin Gupta admits geopolitical tensions are making operations tougher, and even a weaker rupee hasn't helped much since import prices keep climbing.
Generic drugmakers can't easily pass on these higher costs due to fixed contracts, so everyone's margins are under strain, and management warns this squeeze could persist for some time.