Sector Update | 16 March 2018
Sector Update| Healthcare
Healthcare
Performance of top companies:
February 2018)
Company
IPM
Sun Pharma
Abbott India
Cipla
Zydus Cadila
Mankind
Alkem
Lupin
Torrent Pharma
Pfizer
Glenmark Pharma
Sanofi
Dr Reddy Labs
GSK Pharma
Alembic Pharma
Ipca Labs
Natco
Ajanta Pharma
Merck
Biocon
MAT gr Feb-18
(%)
(%)
5.7
7.1
6.2
8.0
3.7
8.4
7.2
4.8
9.7
4.9
(2.7)
8.6
9.4
6.2
7.5
(1.2)
(5.2)
(0.7)
8.2
5.0
11.2
6.0
12.5
5.7
1.9
11.8
12.2
15.0
2.5
3.1
7.9
11.6
14.4
1.8
6.5
2.2
(9.7)
10.3
3.4
20.6
Price decline impedes IPM growth
Lupin, Dr. Reddy and Abbott witness highest growth
Indian pharmaceutical market's (IPM) secondary sales grew at a healthy rate in
February (marginally lower than January growth of 9.5%), led by strong volume
growth. However, pricing growth has been under pressure for almost nine
quarters now. IPM grew by 7.1% YoY in February 2018 and 8.1% YoY over
December-February 2018.
Volumes have been on an uptrend since last two quarters (up 6.5% in February,
after declining in June-August 2017 quarter). Also, growth in new products has
been stable for the last 3-4 quarters (+2.8% YoY in February). Prices, however,
declined for the second quarter (-1.4% YoY in February).
Moving annual total (MAT) growth stood at 5.7% in February, as against 5.6%
YoY in January.
Companies outperforming the IPM in February in terms of secondary sales were
Lupin (+15%), Dr. Reddy’s (+14.4%), Abbott India (+12.5%), Alkem (+12.2%),
Mankind (+11.8%), Sanofi India (+11.6%), Ajanta Pharma (+10.3%) and Glenmark
(+7.9%).
Natco Pharma reported a 9.7% YoY decline in secondary sales in February 2018.
Cadila (+1.9%), Torrent Pharma (+2.5%), Pfizer (+3.1), GSK Pharma (+1.8%), IPCA
(+2.2%) and Merck (+3.4%) largely underperformed the IPM in February.
Respiratory (7.6% of IPM) posted significant growth of 21% YoY in February on
low base, followed by Vaccines (+14.3%; 1.8% of IPM). Barring Anti-Neoplastics
(2% of IPM), which continued to decline for the second straight month, all
therapies reported growth in February.
Most therapies – albeit showing an uptrend – underperformed IPM growth.
In value terms, secondary sales grew 5% YoY for DPCO-listed products and 7.5%
YoY for non-DPCO products during the month. Volumes grew 7.2% YoY for
DPCO-listed products and 7.8% YoY for non-DPCO products in February.
FDC-banned drugs (~2% of IPM) grew 21.7% in February, while non-banned
drugs grew by 7.6% YoY. Secondary sales for Indian companies increased 6.6%
YoY, while those of MNC companies grew by 9.2% YoY in February.
Price Growth (%)
8.1
3.6
3.2
1.3
5.3
2.8
1.5
-0.7 -0.6
3M-Aug 17
2.7
-1.7
3M-Nov 17
4.3
New Product Growth (%)
Total Growth (%)
8.1
6.5
2.8
-1.2
3M-Feb 18
Source: AIOCD, MOSL
Respiratory and Hormones lead among therapies
DPCO v/s non-DPCO market (February-18)
FDC ban impact (February-18)
Exhibit 1: Volumes continued to grow, but price decline restricted growth
12.3
Volume Growth (%)
7.3
3.4
1.2
3M-Nov 16
3M-Feb 17
6.8
3.9
1.6
2.7
3M-May 17
Kumar Saurabh
(Kumar.Saurabh@MotilalOswal.com); +91 22 6129 1519
Ankeet Pandya
(Ankeet.Pandya@MotilalOswal.com)
18 August 2017
Investors are advised to refer through important disclosures made at the last page of the Research Report.
1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.