India’s extended monsoon season is proved to be a manna from the heaven for the domestic drug makers.
Encouraging trends have emerged from the November sells.
This has sparked modest investor interest in select pharma stocks.
Among the top 10 drug manufacturers, Sun Pharmaceutical Industries, Cipla, Cadila Healthcare, Lupin, Mankind Pharmaceuticals, Alkem Laboratories and Torrent Pharmaceuticals posted sales growth in the range of 12-18% in November.
As per the data from market research firm AIOCD-AWACS, pharmaceutical sales rose 14.5% year-on-year to Rs 12,624 crore.
This was one of online steroids shop the best growths seen in more than 32 months.
In terms of moving annual turnover (MAT), which considers the past 12 months’ turnover, the MAT November growth is at 9.8%.
Sun Pharmaceutical, India’s largest drugmaker, posted a 14.5% growth in sales for the month to Rs 1,035 crore, while the Abbott group, the largest multinational firm and India’s second-largest, posted 12% growth to Rs 779 crore.
While sales of drugs under the national list of essential medicines, which come under price control, grew 15.2% to Rs 1,245 crores, that of medicines not under price control grew 14.6% to Rs 10,866 crores.
Among the major therapy segments, anti-infective and respiratory drug sales led the growth with 17.0% and 19.7% respectively in November.
Interestingly, the anti-diabetic and cardiac segment’s sales continue to record double-digit growth and only to do so among the top-10 therapies.
Analysts believe that the pick up in volumes is the highlight after a negative volume growth of about 2.7% in October.
Overall volume growth has been better this year. Additionally, Indian pharma companies outperformed multinational companies, which happened for the first time in the last six months.
The domestic pharma market continues to remain strong.
Besides, analysts expect the domestic market to continue to do well as lifestyle diseases are on the rise.
However, risks to the domestic pharma market could come from a revision in the National List of Essential Medicines.
This constitutes about 10% of the domestic pharma market.
Another factor to watch for would be growth rates post the acute season.
Sales growth could tend to slow down in the coming months.
The pharma market penetration is still considered low in India, even as the affordability of drugs has been rising.
However, the game seems to be shifting in favor of firms that have a strong domestic formulations portfolio.
In short, the action is likely to become more stock-centric and hence we expect companies having large domestic exposure and presence in APIs to get impacted positively ahead in terms of operational metrics like topline growth and margins
Smaller Pharma players like ipca Ajanta Pharma and cadila could also see good days ahead
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