Company

2021

3 September

name

Sector: Healthcare

hfy

Healthcare

Pharma

Earnings CAGR

FY21-23E (%)

35.8

34.9

15.8

29.1

51.6

38.3

25.9

23.2

15.4

13.2

7.9

Divi’s

Gland Pharma

Sun Pharma.

Laurus Labs

Solara Active Pharma

Biocon

Lupin

Dr. Reddy's Lab.

Cipla

Zydus Cadila

Aurobindo Pharma

Tushar Manudhane - Research Analyst

(Tushar.Manudhane@MotilalOswal.com)

Bharat Hegde, CFA

(Bharat.Hegde@motilaloswal.com)

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Healthcare: CRAMS/API – Consistency

breeding stability

01

Page #3

02

Page #5

Summary

Valuation metrics

03

Page #6

04

Page #10

CRAMS – Rising prospects in

Biologics and Synthesis

segments

US Generics: The search for greener

pastures

05

Page #17

06

Page #21

Growth levers in US Generics a

work-in-progress

Growth in DFs accelerates post the

second COVID wave

07

Page #27

08

Page #30

API: Supply disruption/Complex

APIs are key growth levers

Sector slightly above its 10-year

valuation multiple

09

Page #31

10

Page #32

Capability matrix

Companies

Healthcare | CRAMS/API – Consistency breeding stability

Healthcare

CRAMS/API – Consistency breeding stability









Healthcare

Alembic Pharma.

Alkem Labs.

Ajanta Pharma

Aurobindo Pharma

Biocon

Cadila Health.

Cipla

Divi’s Labs.

Dr. Reddy’s Labs.

Gland Pharma

Glenmark Pharma.

Granules India

GSK Pharma.

IPCA Labs.

Jubilant Pharmova

Laurus Labs

Lupin

Solara

Strides Pharma

Sun Pharma.

Torrent Pharma.

Rating

Neutral

Buy

Buy

Buy

Neutral

Buy

Neutral

Buy

Neutral

Buy

Neutral

Buy

Neutral

Buy

Buy

Buy

Neutral

Buy

Buy

Buy

Neutral

Indian Pharma companies are looking at a sustainable growth opportunity in the

coming decade as the lack of differentiation in Generics has chipped away at margins

due to increased competition.

While companies with a large US Generics exposure are looking at niche opportunities

like Complex Generics/Specialty drugs, Contract Research and Manufacturing Services

(CRAMS) for API/Formulation has emerged as a successful opportunity for companies

with a sound technical, manufacturing, and regulatory expertise.

The branded Domestic Formulation space remains a high return ratio segment, with a

moderation in growth, excluding COVID-19, due to the reduced burden of Acute

diseases.

We believe DIVI, GLAND, SUNP, and LAURUS are suitably positioned in this framework

for a superior business trajectory. DIVI/GLAND is expected to continue to outperform

among Contract Development and Manufacturing Organization (CDMO) players. We

expect SUNP to turn the tide in US sales with its Specialty business, albeit with a

longer gestation period. We expect LAURUS to outperform the industry in APIs and

Formulations in the near term, with Biologics/Fermentation CDMOs acting as a key

trigger over the next 3-5 years.

CRAMS – Rising prospects in Biologics and Synthesis segments

CRAMS has emerged as a niche segment, offering a high growth potential. The

global CRAMS segment is expected to clock 6.2% CAGR over CY21-26E to touch

~USD170b.

Biologics-based CRAMS

is expected to witness 11% CAGR over CY20-

26E, led by ever-rising number of products under development for targeted action

and limited manufacturing skill set of respective companies. With ~6,000 molecules

in the pipeline,

‘small molecules’

constitute a dominant share within the CRAMS

segment.

With the ease of access to capital for emerging Pharma companies, there is a surge

in Biopharma companies focusing on R&D and outsourcing manufacturing at the

research/commercial level. This, along with cost consciousness of larger Pharma

companies, is providing a fillip to this segment. Indian CRAMS players are uniquely

positioned to outperform the industry in this segment.

US Generics – The search for greener pastures

After sales declined to USD56b in CY19 from USD66b in CY16, the Generics industry

in the US clocked a steady YoY growth in CY20. The improved launch pace was

sufficient enough to counter the price erosion in the base business. However, the

annual pace of filings has slowed to ~800/230 in FY21/4MFY22 from more than

1,000 in FY17. This is partly due to increased filings for complex products and

COVID-related hurdles. Indian companies are working on different strategies such

as: a) building Complex Generics, NCEs (New Chemical Entity), and branded

Generics, or b) in-licensing/partnering to augment capabilities.

Most potential products are spread over the development/approval stage, and are

sometime away from commercialization. This has made companies vulnerable to

higher competition in their base business, the result of which manifested in a

sequential sales decline of 5% in 1QFY22. Although we like the move of Generic

companies to niche segments, we expect US sales to remain under pressure over

the near to medium term.

3

80.0

40.0

PE Relative to Nifty PE (%)

Avg (x)

17.9

28.0

0.0

-40.0

3 September 2021

Healthcare | CRAMS/API – Consistency breeding stability

A gradual recovery in Domestic Formulations (DFs), excluding COVID-

related therapies

The DF market showed remarkable (12.8% YoY) growth on a MAT basis in Jul’21

after exhibiting a downtrend in growth from Jul’15 to Jul’20. This is due to a spike in

consumption of COVID-related medicines. The enhanced usage of digital tools has

started transforming marketing in the DF segment.

The product launch pace was elevated with Anti-infectives (17), Cardiac (11), Anti-

Neoplastics (9), and Anti-Diabetic (9) witnessing the highest number of launches

over the past 12 months. While the COVID-related offtake is subsiding with lower

cases, we expect core therapies to revive gradually going forward.

Supply disruption and Complex APIs are key levers of growth in API

Global API sales are expected to exhibit ~6% CAGR over CY21-26E to touch USD259b

(v/s 3.6% CAGR witnessed over CY18-20), given the rising prevalence of Chronic

disorders and growing development trend in innovative therapeutic drugs. In

addition to increasing demand and re-consideration of the API source by

formulators, shutdown of API factories in China is expected to drive better business

opportunities for Indian API companies. As a result, the Indian API sector is expected

to outperform other countries, with an estimated CAGR of 9.6% over CY21-26E.

Focus on Complex Formulations/Generics by Innovators/Generic companies is

expected to drive faster growth for Complex APIs, at 9.3% CAGR over CY21-26E, and

is expected to account for 62% of global API sales in CY26E.

Remain positive on DIVI, GLAND, SUNP, and LAURUS













We remain positive on DIVI, GLAND, SUNP, and LAURUS based on our analysis of

their strengths in one or more areas.

CRAMS/custom synthesis remains the fastest growing opportunity. Based on its

relationships and execution track record,

DIVI

is best placed among Indian

Pharma companies to outshine in this space.

We like

GLAND

due to its presence in one of the most sought after segments for

Formulations companies – Injectables, and its unabashed compliance record.

SUNP

has taken the bold and decisive step to venture into the US Specialty

segment. Given its experience in commercialization, expansion in the offing, and

ramp-up in sales, SUNP’s specialty business has the potential to add a high

margin business over the next 5-7 years. Its strength in DFs can continue to

support its efforts to succeed in the Specialty segment.

After a multi-year journey to transform from an ARV API player to a Formulations

player,

LAURUS

is progressing towards a differentiated Pharma company. Its

current strength lies in the ARV segment. It is reaping growth in custom synthesis on

strong execution, and is building its US Generics pipeline. It has ventured into

Biologics/Fermentation CDMO through the acquisition of Richore Lifesciences.

Strong backward integration bodes well for its multi-year growth journey.

With the Aurore Life Sciences (ALS) acquisition,

SOLARA

is embarking on its next

journey in both Generic APIs as well as CDMO. While backward integration in

Ibuprofen gives it a distinct advantage to weather the pricing pressure, the ALS

acquisition accelerates its CRAMS aspirations, with an upside from synergies and

new inorganic opportunities.

3 September 2021

4

Healthcare | CRAMS/API – Consistency breeding stability

Valuation metrics

Exhibit 1: Valuations of companies in our coverage universe

Company

Sun Pharma.

Divi’s

Cipla

Zydus Cadila

Aurobindo Pharma

Dr. Reddy's Lab.

Gland Pharma

Biocon

Lupin

Torrent Pharma.

Alkem

Ipca

Alembic

Ajanta

Laurus Labs

Granules India

Strides

Jubilant Life.

Glenmark Pharma.

GSK Pharma.

Solara Active Pharma

FY21

25.0

75.6

30.0

19.8

54.0

143.6

60.9

5.5

26.0

74.9

134.1

88.7

59.9

73.9

18.3

22.3

22.2

54.1

35.0

29.4

45.0

EPS (INR)

FY22E

29.5

104.8

35.4

24.3

56.3

191.3

86.7

6.9

30.6

80.4

145.5

88.2

40.8

80.3

24.1

23.4

(8.1)

48.8

39.6

34.7

82.4

FY23E

33.6

139.4

39.9

25.4

62.8

218.1

110.9

10.6

41.2

95.2

164.4

100.2

50.8

97.9

30.5

27.4

38.3

56.2

44.9

38.0

103.4

RoE (%)

FY22E

FY23E

14.4

14.4

27.1

29.5

13.8

13.6

16.5

14.3

14.0

13.8

16.8

16.6

21.4

22.0

10.5

14.7

9.6

11.9

22.1

23.0

21.6

20.8

21.6

20.5

15.4

17.0

21.7

22.4

41.0

37.3

23.7

22.3

(2.7)

12.3

15.0

15.0

14.7

14.6

34.3

32.8

23.1

24.0

P/E

FY22E

26.7x

49.6x

26.6x

22.9x

13.5x

25.6x

46.1x

52.5x

31.7x

39.7x

26.4x

28.8x

19.0x

27.5x

27.1x

14.6x

NM

13.2x

13.5x

43.8x

20.0x

FY23E

23.5x

37.3x

23.6x

21.9x

12.1x

22.5x

36.0x

34.4x

23.5x

33.5x

23.3x

25.3x

15.3x

22.6x

21.4x

12.4x

16.0x

11.5x

11.9x

39.9x

16.0x

EV/EBITDA

FY22E

FY23E

18.1x

16.0x

34.8x

26.5x

16.3x

14.4x

14.7x

13.7x

7.5x

6.3x

15.6x

12.9x

33.2x

26.1x

22.3x

16.5x

16.6x

12.5x

19.9x

17.2x

22.6x

20.0x

20.8x

17.7x

12.4x

9.8x

19.6x

17.0x

18.1x

14.4x

10.9x

7.9x

17.7x

7.0x

7.0x

6.3x

7.7x

6.7x

30.8x

29.1x

10.0x

7.9x

Source: MOFSL, Bloomberg

3 September 2021

5

Healthcare | CRAMS/API – Consistency breeding stability

CRAMS – Rising prospects in Biologics and Synthesis segments



Expect emerging

Biopharma companies,

with a focus on R&D and

access to capital, to drive

growth in the Biologics

CDMO sector





CDMO is the most promising segment in the Pharma space. Indian companies are

building their skill set to cater to Biologics and Synthesis-based CDMO.

With a spurt of emerging Biopharma companies, developing ~3,500 recombinant

proteins/antibodies and having limited manufacturing capabilities/capacity, it

provides the right ingredient to partner with CDMO companies.

Small molecules are still a dominant play in the CDMO segment, with ~6,000

molecules in the pipeline providing business opportunities across the value chain of

product development to commercial manufacturing.

Huge product pipeline/lookout for manufacturing partners bodes well for

Biologics-based CDMO players



CDMO opportunities in

Biologics are restricted

not just to Formulation

manufacturers.

Fermentation-based

CDMO opportunities to

supply the drug

substance for Biologics

are evolving quickly







Global Biopharma sales are expected to clock 10% CAGR and touch USD461b

over CY20-25E. Biologics are gaining popularity in Oncology and Autoimmune

segments, with their better targeted action mechanism. Biologics protects

innovators from generic competition to a greater extent than small molecules,

given their complexity to develop and manufacture and limited/no mandatory

substitution requirements for Biologics in developed markets.

The global Biologics CDMO market is expected to touch USD19b, with 11% CAGR

over CY20-26E. This represents 3-5% of the total Biologics market. There are

~3,500 recombinant proteins/antibodies in R&D and commercial stages.

Biologics CDMO is expected to be driven by: a) small/emerging Biopharma, with

minimal manufacturing capabilities, and b) Big Pharma looking for additional

manufacturing partners. The number of Biologics under development by small

and emerging Pharma companies is rising. They have been supported by VC

funding, especially to emerging Pharma companies that are more focused on

R&D and not manufacturing. Such companies constitute ~80% of the current

development pipeline. Around 70% of their development and manufacturing

requirements are outsourced, with smaller Biotech companies outsourcing their

entire development and manufacturing services.

With an increasing number of products from such emerging Biopharma getting

approved, the need for Biologics CMO partners will also increase.

Exhibit 3: Biologics CDMO market size to almost double over

CY20-26E

Biologics CDMO market size (USDb)

18.6

Exhibit 2: Sales of Biologics are growing faster than drug

spending

Global biopharma sales (USDb)

461

284

9.9

2020

2025

Source: MOFSL, IQVIA

2020

2026

Source: MOFSL, Mordor Intelligence

3 September 2021

6

Healthcare | CRAMS/API – Consistency breeding stability





Biologics CDMO still constitutes a small proportion of total Biologics sales. This is

mainly due to two reasons: a) Biopharma sales are estimated using the price of

the end-product, whereas the CDMO market is estimated using revenue realized

by CDMO players, roughly equal to COGS of branded Biopharma drugs, and b)

large innovators still manufacture a big chunk of the drugs themselves,

especially those targeted at regulated markets, to minimize the risk from

disruption.

Loss of exclusivity (LoE) in Biologics provides an additional opportunity to CDMO

players as there is a higher focus on the COGS for Biosimilars due to their lower

pricing as compared to branded Biologics.

See healthy opportunity

for CDMO players from

LoE in Biologics over the

next four years due to

the cost consciousness of

Biosimilar players

Exhibit 4: LoE opportunity in Biologics to double over the next five years v/s that in the last

five years

Figures in USD b

Biologics LOE (USDb)

18.9

34.3

12.3

9.5

7.4

3.9

2.3

0.6

4.7

8.3

4.2

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: MOFSL, Industry

Small molecules still dominate new approvals/overall CDMO opportunity



Despite the strides made in Biologics, small molecules continue to dominate

drug approvals and products under development.

Exhibit 5: Small molecules constitute ~73% of drugs in the

pipeline

Small molecules as a % of all New Molecular Entities

(NME) approved by USFDA

79%

74%

71%

68%

75%

Exhibit 6: Growing number of NCEs in the pipeline

NCEs in pipeline from pre-clinical to clinica stages

5,370

5,962

4,439

4,965

5,253

2016

2017

2018

2019

2020

2015

2016

2017

2018

2019

Source: MOFSL, USFDA

Source: MOFSL, Company

Innovation and

expansion of the R&D

pipeline in small

molecules to support

CDMO opportunities

from pre-clinical to

commercial supplies

3 September 2021





With better funding available to emerging Pharma companies, and with CDMOs

available to cater to their needs (right from pre-clinical to commercial stages), a

number of research-focused Pharma companies are fast emerging, especially in

developed countries.

There were ~6,000 small molecules in the pipeline in CY19, up from ~4,500 in

CY15. The outsourced market in small molecules was estimated at USD70-80b

7

Healthcare | CRAMS/API – Consistency breeding stability







across preclinical, clinical, and commercial stages, and is expected to continue to

grow at 5-6% over the next 5-6 years.

High Potency APIs (HPAPI) has emerged as another niche segment in small

molecule APIs, constituting ~30% of chemical compounds in the pipeline. They

are characterized by better targeting and higher efficacy, and are increasingly

being used in Oncology, Anti-Diabetics, and Autoimmune applications.

CRAMS includes CRO (Contract Research Organization) and CDMO. Companies

offering CRO services focus on research and drug discovery phases, with an

offering in biochemistry, biology, data and statistical analysis, and regulatory

filing services.

Manufacture of low volume and clinical quantities of APIs and Formulations is

sufficient for clinical trials, but substantially lower than commercial quantities.

Exhibit 7: Small molecules have a market size of more than USD70-80b for CDMO players, growing at 5-6% annually

Drug discovery and pre-

clinical development

Outsourced market size

CAGR (%)

Small molecules, outsourced market

USD12-18b

5-6%

USD8-12b

Development

USD23-35b

5-6%

USD17-22b

~USD120b; 6-7% CAGR

Commercial

manufacturing

USD67-80b

4-5%

USD50-60b

Source: MOFSL, Company

CDMO market to witness 6% CAGR over CY20-26E

Healthy mix of innovator

and generic API CDMO

provide a two-fold

opportunity





The global CDMO outsourcing market is expected to grow at 6.2% CAGR over

the next five years. A similar pace of growth is expected in the Global API CDMO

market.

API CDMO accounts for ~75% of the global CDMO market. This is due to a focus

on cost by both Generic and Innovator Pharma companies. Many innovators

have divested their API facilities to concentrate on the manufacture of

Formulations. This has resulted in a larger CDMO opportunity for API

manufacturers.

Exhibit 9: …and API CDMO market to grow at a similar pace

Innovator drug API CDMO (USDb)

159

169

38.4

41

44.2

46.9

49.7

Generic API CDMO (USDb)

Exhibit 8: Total CDMO market to grow at 6.2% CAGR…

Global CDMO market (USDb)

99

106

115

125

133

142

150

27.5

48.3

CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26

Source: MOFSL, IQVIA



29.8

51.6

32.6

55.2

35.4

59.4

62.4

65.3

68

72.1

76.5

CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26

Source: MOFSL, IQVIA

North America and Europe are the major markets for CDMO and account for

~70% of the outsourcing in global Formulations. This is expected to remain

almost unchanged over the next five years.

8

3 September 2021

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 10: US was the biggest market for outsourcing in

CY20…

Global outsourcing of Formulations by geography in CY20

Exhibit 11: …and will continue to remain so till CY25

Global outsourcing of Formulations by geography in CY25E

LatA,

5%

LatAm

5%

Europe

27%

North

America

43%

Europe

27%

North

America

41%

APAC

23%

Source: MOFSL, IQVIA

Middle East

and Africa

4%

APAC

21%

Source: MOFSL, IQVIA

Middle East

and Africa

4%

Low cost, technical

know-how, end-to-end

capabilities, and

customer relations put

India in a strong position

to succeed in the CDMO

segment

India has the right mix of skill set and manufacturing capability/capacity





CRAMS players in India offer end-to-end services, right from pre-clinical trials to

manufacturing finished dosages. India has abundant high-quality, lower cost

talent to support the drug discovery and research processes. The cost of setting

up a facility in India is up to 50% lower v/s that in the US and Europe.

India’s CRAMS segment posted a 48% CAGR over FY15-18 to touch a market size

of USD17b. It is expected to post a strong CAGR (25%) over FY20-24.

Exhibit 12: CRO and CDMO offer their services from the drug discovery stage to commercial manufacturing

Source: CRISIL, MOFSL

3 September 2021

9

Healthcare | CRAMS/API – Consistency breeding stability

US Generics: The search for greener pastures







While price erosion stabilized by the end of CY20, the performance of companies in

the past six months indicates increased competitive intensity dragging overall

profitability.

The complex product pipeline remains a key lever for growth. However, evolving

regulatory aspects creates a near to medium term volatility in earnings.

A few recent inspections imply a rise in regulatory risk with the ease of travelling.

Decline in the sales of Generics stabilized in CY20

Generics sales grew for

the first time on a YoY

basis in the last five years

in CY20





Spending on Generics fell to USD57b in CY20 from USD67b in CY16. While the

volume offtake increased considerably, the decline in value terms is largely

attributed to steep competition in Generics, especially in oral solids.

Unbranded Generics prescriptions (adjusted) saw a 3.2% CAGR over CY16-20,

reaching 5.6b prescriptions in CY20.

Exhibit 13: Spending on unbranded generics in the US is

picking up

Unbranded Generics spending (USDb)

-0.3

-2.8

-5.5

-11.2

YoY Growth (%)

1.1

Exhibit 14: Generic Rx growth stable ~3% YoY

Unbranded Generics adjusted Rx (mn)

3.4

3.1

3.3

YoY Growth (%)

3.0

66.8

CY16

59.3

CY17

56.0

CY18

55.9

CY19

56.5

CY20

4936

2016

5105

2017

5263

2018

5435

2019

5597

2020

Source: MOFSL, IQVIA



Source: MOFSL, IQVIA

Increased generic competition led to a 14% decline in spending per prescription

in CY17. While competition remains intense, the extent of price erosion has

reduced till CY20.

Exhibit 15: Price erosion (at the Rx level) stabilized in CY20

Unbranded Generics price/Adj. Rx (USD)

-3.4%

Est. Price erosion

-1.8%

Price erosion at the Rx

level in the US had

stabilized in CY20

13.5

CY16

-8.3%

-14.1%

11.6

CY17

10.6

CY18

10.3

CY19

10.1

CY20

Source: MOFSL, IQVIA

3 September 2021

10

Healthcare | CRAMS/API – Consistency breeding stability





We expect gross/net spending to grow at 3.1%/1.8% CAGR over CY21-25E. The

growth drivers over CY21-25 are expected to be: a) an aging US population, b)

higher spending on new branded drugs, c) price increases in branded drug, and

d) rising affordability of drugs going generic.

Over CY16-20, drugs worth ~USD70b lost their exclusivity. During the 10-year

(CY16-25) period, CY20/CY21 have been two of the slowest years in terms of

LoE, hindering growth of generics to some extent.

Trend reversal seen in companies under our coverage during 1HCY21



CY20 sales for companies under coverage (Exhibit 15) have also been steady in

line with industry trends.

Exhibit 16: US sales run-rate slows down in 1H, with a 5% QoQ sales decline in 2QCY21

US sales impacted by

fewer launches seen in

1QFY22

Aggregate US sales (USDm)

6,539

6,732

7,517

7,437

3,590

CY17

CY18

CY19

CY20

1HCY21

Source: MOFSL, Company



Aggregate US sales for our coverage companies slowed down in 1H, due to a

sharp rise in competition, which led to a 5% QoQ decline in the US sales in

2QCY21.

The slowdown in filings/approvals moderated incremental business







The USFDA approved a record number of ANDAs in FY19, up from 783 in FY18.

ANDA filings and approvals saw a slight decline with the onset of the COVID-19

pandemic towards the end of FY20. The pace of ANDA filings as well as

approvals slowed down in FY21. However, ANDA approvals increased to 791, as

approvals for products filed in previous years flowed through in FY21.

We expect ANDA filings and approvals to improve slightly going forward as

normalcy returns around the world given the pace of vaccination.

Number of ANDAs are expected to slow down on a normalized basis as more

and more Generic companies focus on Complex Generic products and

differentiated dosage forms, moving away from me-too Generics.

3 September 2021

11

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 17: ANDA submissions and approvals slow down over the last two years due to

COVID-19 pandemic

ANDA Submissions

1,116

1,102

783

650

551

361

190

398

223

231 192

42*

FY17

FY18

FY19

FY20

FY21

4MFY22

Source: MOFSL, USFDA

ANDA Approvals

ANDA Withdrawals

USFDA ANDA approvals

rose in FY21 on a YoY

basis

1,024

950

864

742

799 791

*ANDA withdrawal data in FY22 available only for three months

Indian Pharma companies have reduced the pace of filings and approvals



The slowing pace of filings

and approvals are keeping

new launches in check











Although USFDA’s approval pace increased in FY21, the pace of filings by Indian

Pharma companies and approvals have slowed down.

Total ANDA approvals declined marginally for our coverage companies to 209 in

FY21 from 217 in FY20.

Barring ARBP, which has kept pace with its filing history, all companies under

our coverage saw a lower number of ANDA filings/approvals over the past 12

months.

The slower rate of new launches has resulted in higher competition in the base

business, especially in me-too Generic products.

All the aforementioned factors have led to a decline in US sales for Indian

Pharma companies, which declined by 5% QoQ to USD1.7b on an aggregate

basis in 1QFY22.

Given the pace of filings, we expect new launches to remain muted in the US

over the near to medium term.

Exhibit 18: Aggregate annual ANDA filings for our coverage companies fell by ~8% YoY in FY21 and by ~30% from FY19 levels

Aurobindo

75

Alembic

Cadila

DrReddy

Sun

ANDA filings

Lupin

Torrent

Strides

Cipla

Alkem

Glenmark

Ajanta

283

50

278

299

224

209

25

0

FY17

FY18

FY19

FY20

FY21

Source: MOFSL, Company

3 September 2021

12

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 19: Filings for ARBP least impacted by the COVID-19

outbreak

Aurobindo ANDA filings

21

25

22

24

17

6

14

8 9 8

Exhibit 20: Approval pace picks up after a slow FY20

Aurobindo ANDA approvals

17

20

10 11

2

13 14

8 9

5

3 4

10

11

7

8

3

20

12

13

11

2

7

10

Source: MOFSL, USFDA

Source: MOFSL, USFDA

Exhibit 21: SUNP’s filing pace tapers over the last two years

Sun ANDA filings

19

Exhibit 22: The pace of approvals has also slowed down

Sun ANDA approvals

12

10

13

10

7

4

5

3

4

3

7

5

9

5 4 4

5

3 4

3

2

7 6 7

8

7

3

6

4

6

1 2

0

Source: MOFSL, USFDA

Source: MOFSL, USFDA

Exhibit 23: LPC’s filings have slowed down over the last nine

quarters

Lupin ANDA filings

20

Exhibit 24: Lack of filings reflects in low approvals

Lupin ANDA approvals

11

7

10

5

1

4 4

8

11

0 0 0

8

4

1 1

9

3

5

3

4

5

3

4

5

4

3

1

3

1

3

4

3

Source: MOFSL, USFDA

Source: MOFSL, USFDA

3 September 2021

13

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 25: ALPM’s filing pace revives in FY21

Alembic ANDA filings

12

6

14

13

10

4

6

4 5

Exhibit 26: Approvals have kept pace with filings

Alembic ANDA approvals

9

6

3

2

3

1

0

0

7

6

4 4

9

5

2

6

3

5

8

3 4

3

8

7

1

Source: MOFSL, USFDA

Source: MOFSL, USFDA

Exhibit 27: Filing pace revives in 1QFY22 after a slow FY21

Glenmark ANDA filings

7

3

4

3

0

8

8

Exhibit 28: Approvals slows down for GNP in FY21

Glenmark ANDA approvals

8

5

6

4

1

1

4 4 4

3

0

9

5

2

2

3

1

3

1

3

1

0

3

2

0

3

3

Source: MOFSL, USFDA

Source: MOFSL, USFDA

Exhibit 29: Regulatory headwinds impacts filings for TRP

Torrent ANDA filings

7

3

Exhibit 30: Approvals have been difficult to come by

Torrent ANDA approvals

7

8

6

5

3

6

3

0

1 1 1

0

3

0 0

1

2

0 0 0

4

1 1

7

1

2

2

0 0

1

0 0

Source: MOFSL, USFDA

Source: MOFSL, USFDA

3 September 2021

14

Healthcare | CRAMS/API – Consistency breeding stability

Compliance risk could increase as the USFDA begins physical inspections in

India



USFDA conducts three

inspections in India since

Feb’21 v/s zero in CY20

after the onset of the

COVID-19 pandemic











USFDA inspections have considerably slowed down since the onset of the

COVID-19 pandemic due to safety concerns and travel restrictions across the

world. The USFDA conducted more than 19,000 inspections across all divisions

and geographies in CY19. This fell to ~6,100/~1,750 in CY20/1HCY21.

Of the ~1,750 inspections conducted in CY21 till date, 1,699 were in the US, 43

in China, and only one in India (JOL’s Roorkee plant).

Issuance of warning letters to Pharma companies for aspects related to drug

quality has also reduced to 21 in CY21 from 112 in CY19 due to lower number of

inspections conducted by the USFDA

The slowdown in inspections has had a mixed outcome on Indian Pharma

companies. While it has reduced the risk of an adverse regulatory outcome to

facilities, which are currently under compliance, it has delayed the resolution of

facilities under USFDA sanctions (OAI/warning letters). The delay in inspections

has led to a deferral in commercialization from new sites for companies like

SOLARA.

Companies severely impacted by the delay are TRP (two plants under sanctions),

LPC (two warning letters in India awaiting resolution), IPCA (awaiting resolution

of the Import Alert and warning letter).

Companies with a strong compliance record such as GLAND/DIVI/PIEL remain

unaffected.

Exhibit 32: Lower number of inspections keeps warning

letters in check

Warning Letters Issued

112

94

65

49

6,148

21

Exhibit 31: COVID-19 impacts USFDA inspections from CY20

Total inspections by USFDA

22,347 21,459

20,261 21,091

19,305

1,746

CY15

CY16

CY17

CY18

CY19

CY20

CY21

CY17

CY18

CY19

CY20

CY21

Source: MOFSL, USFDA

Source: MOFSL, USFDA

3 September 2021

15

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 33: Physical inspections by USFDA in India are slowly returning

Recent outcomes of

USFDA inspections in

India have been

underwhelming

Company

Alembic

Pharma.

Jubilant

Pharmova

Aurobindo

Pharma

Facility

Kharkadi, general

Injectables facility

Current status before

inspection

Time

Outcome

Not characterized; Form 483

with five observations

Import alert

Not characterized; Form 483

with seven observations

Source: MOFSL, USFDA

Pre-approval inspection

for product in shortage in Feb'21

the US

Mar'21

Aug'21

Roorkee,

Warning letter

Formulations facility

Unit 1 API facility,

Telangana

Warning letter







The USFDA has started to conduct physical inspections in India through its local

office, albeit at a slower pace. Inspections would be prioritized at mission-critical

facilities, while inspections at other facilities may still be some time away. The

USFDA had said that inspections of US facilities have normalized now.

None of the three facilities, which were inspected by the USFDA in CY21, have

cleared their inspections. JOL received an import alert, while the outcome of the

other two inspections is awaited.

Resumption of inspections in India will increase regulatory risk for companies

with a large number of facilities and those with a checkered regulatory past.

However, it will offer a chance for companies like IPCA and TRP to get their

facilities cleared.

3 September 2021

16

Healthcare | CRAMS/API – Consistency breeding stability

Growth levers in US Generics a work-in-progress





Large Generic companies are trying myriad routes to expand in low competition, but

high complexity, product segments.

Most Generic companies are focusing on internal abilities in their areas of strength,

while opting for in-licensing/partnering to add capabilities/products.

Efforts towards building a niche product pipeline





Generic Pharma companies are focusing on differentiated product offerings to

navigate higher competition in the Generics space in the US.

Indian Pharma companies have a presence in different categories of Complex

products, including NCEs/NBEs.

Exhibit 34: Generic companies are now focusing on differentiated and complex products

Me-too generics just

won’t cut it any longer for

the US Generics segment

Company

SUNP

LPC

CIPLA

CDH

DRRD

ARBP

GLAND

BIOS

Differentiated product pipeline categories for US



US Specialty Pharma and Biosimilars



Partnered for peptide products, Inhalers, iron colloids, depot injectables and

liposomal products, and Specialty women's health



Peptide products, injectables, and inhalers, including partnered products



Complex injectables, orphan drugs, NCEs (Saroglitazar and Desidustat),

Biosimilars, and Complex OSDs



Complex OSDs and injectables



Biosimilars, inhalers, nasal sprays, depot injections, and vaccines



Peptides, long-acting injectables, suspensions, hormones, vaccines, and Biologics

CDMO



US pipeline – Pertuzumab, two products in Immunology, Glargine 300U and one

more product in Diabetes, and two more Biosimilars in other therapies

Source: MOFSL, Companies

Exhibit 35: Next two years may see some key launches

Company

SUNP

LPC

CIPLA

CDH

DRRD

ARBP

GLAND

BIOS

Key product launches in the next two years



Illumya, Cequa, Winlevi key products in the Specialty segment, and g-Revlimid



Ramp-up in g-Albuterol and g-Brovana, and upside from g-Spiriva in FY23



Ramp-up in g-Albuterol, expected launch of g-Advair in FY23, and g-Revlimid



In-licensed products, including g-Enoxaparin, and g-Revlimid



g-Kuvan launch in 2HFY22, ramp-up in g-Vascepa, and g-Revlimid



Ramp-up in injectable sales, and potential Biosimilar launches in the US in FY24



Single-source supply contract for g-Enoxaparin



b-Insulin Aspart, b-Bevacizumab, and ramp up in b-Insulin Glargine

Source: MOFSL, Companies

LoEs in small molecules provides a ray of hope

Cumulative opportunity

from the LoE in small

molecules is ~USD80b

over CY22-25E



There is a 10-year window (CY16-25) in terms of LoE opportunities in small

molecules. This has resulted in difficult times for Generic Pharma companies in

the US. However, LoE opportunities are expected to increase significantly,

providing a fillip to the US sales of Generic companies.

3 September 2021

17

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 36: LoEs from small molecules in CY22 to support growth for Generic companies

Figures in USD b

Small Molecules LOE (USDb)

78.5

22

17.2

69.6

21.9

14.2

16

11.8

16.4

11.2

10.8

17.4

CY16

CY17

CY18

CY19

CY20

CY21

CY22

CY23

CY24

CY25

Source: MOFSL, IQVIA

Drug shortages offer another growth opportunity



Drug shortages provide

opportunities for

companies with a wide

product portfolio and for

those with a strong

compliance record



Quality issues were the main reason for the shortage of drugs in the US (64%),

followed by raw material issues (27%).

Companies under import alert are banned from exporting drugs to the US. Even

regulatory action (such as a warning letter/OAI) by the USFDA may require

corrective measures, temporarily impacting production and disrupting supply to

the US market. At times, this results in a shortage of drugs in the US. The

timeline to resolve compliance issues varies from at least a year to more than

three years, leading to disruptions in the supply of live saving and maintenance

drugs.

Exhibit 38: Drug shortages are the highest in Injectable

products

Current drug shortages in the US by dosage form

Solution

Capsule

5

11 Biologics

Tablet

1

14

Other

8

Loss of

Manufacturing

Site 2%

Quality

Manufacturing

Issues 37%

Source: MOFSL, USFDA

Exhibit 37: Around 65% of shortages is due to quality issues

Increased

Demand

5%

Reasons for the drug shortages

Raw

materials

27%

Quality:

Delays/

Capacity

27%

Discontinuation

2%

Injectable/IV

71

Source: MOFSL, USFDA





About 65% of drugs currently in shortage are seen in Injectables and other

related dosage forms such as IVs. Manufacturing facilities for Injectables find it

hard to maintain compliance with regulatory norms due to the requirement of

sterile processing of drugs. This has led to continued shortages in Injectables,

despite considerable efforts towards automation and removal of human

intervention.

Despite being one of the biggest markets for Generics in the world,

characterized by high competition among Pharma companies, the US continues

to experience drug shortages at an alarming rate. Around 166 drugs were facing

a shortage in the US in CY19. Injectables account for 40-65% of drugs in shortage

annually.

18

3 September 2021

Healthcare | CRAMS/API – Consistency breeding stability





To mitigate the impact of drug shortages, the USFDA has taken numerous

actions in the past. These include:



Identifying the extent of the shortfall to determine if other manufacturers

can increase production to make up for the deficit in supply.



Expediting inspections and priority reviews of submissions from affected

manufacturers and trying to restore production.



Expedite inspections and/or reviews of submissions by other companies

wanting to start or increase production of products in shortage.



Reviewing requests for extensions of expiration dates.



Flexibility in obtaining medically necessary drugs from new/alternate

sources.



Working with the affected manufacturers to identify root causes of

shortages.



Developing risk mitigation measures to allow individual batches of drugs in

shortage to be made available to patients, even when quality requirements

are not met.

Despite these mitigating and reactive measures taken by the USFDA to minimize

the impact of shortages, the same continues to reoccur in the US each year.

Shortages provide Generic companies with opportunities to benefit from the

short term increase in demand. Companies with a wider product portfolio and

strong compliance record, especially in Injectables, fare better than others. Such

contracts also offer better than industry margins due to the short-term nature

and necessity of those drugs.

USFDA’s support for Complex Generics a win-win for Pharma companies

and patients



USFDA’s efforts to

support Generic

companies in developing

Complex Generic

products to reduce the

cost burden of branded

products for patients

bode well for those

companies with strong

R&D capabilities







A Complex Generic product is defined by USFDA as one with: a) complex active

ingredient(s) (for instance, peptides, polymeric compounds, complex mixtures

of APIs, naturally sourced ingredients, etc.), b) a complex formulation (e.g.,

liposomes and colloids), c) a complex route of delivery (for instance, locally

acting drugs such as dermatological products, complex Ophthalmological

products, etc.), d) a complex dosage form (for example, transdermal, metered

dose inhalers, and extended release injectables), e) complex drug device

combination products (for example, auto-injectors and metered dose inhalers),

and f) products for which developers/manufacturers can benefit from USFDA’s

early support with regard to product complexity or uncertainty concerning the

approval pathway or possible alternative approaches.

USFDA publishes product-specific guidance (PSG) for Complex Generic products

every quarter and on a need basis to aid in their development. PSG assists

Generic Pharma companies in identifying the most suitable approaches for

generic drug development, including BE/BA studies, various waivers available to

Pharma companies, and testing methods.

USFDA issues PSG at least two years before the earliest ANDA submission date

and has issued PSG for 90% of non-complex NCEs since Oct’17. For complex

products, USFDA issues PSGs as soon as the scientific recommendation is

available.

USFDA aids in the development of Complex Generics by simplifying the pathway

to regulatory approval, shortens the approval timeline, and also lowers the cost

19

3 September 2021

Healthcare | CRAMS/API – Consistency breeding stability

of development and expense incurred in development, improving profitability in

these segments, and also attracting new Generic companies to develop Complex

Generic products. With competition in the Generic space, patients benefit from

lower expenses on drugs.

Exhibit 39: Increasing trend in the number of PSGs (new or revised)

New PSGs

153

108

60

77

44

57

70

42

4

FY13*

FY14*

FY15*

FY16*

FY17*

FY18*

FY19*

FY20*

Source: USFDA

86

72

Revised PSGs

136

107

145

107

149

*For USFDA, FY13 begins on 1

st

Oct’12 and ends on 30

th

Sep’13





The number of new and revised PSGs issued by the USFDA indicates greater

propensity of Pharma companies to develop complex products and increasing

support from the regulator to the Pharma industry to introduce generic

products in the US as and when they are allowed.

The base business continues to deteriorate at a higher pace as compared to

incremental business from new launches over the near to medium term. The

efforts of companies to arrest the decline and grow and improve return ratios in

the US Generics segment are expected to drive growth over the next 4-5 years.

This would be led by timely approval for niche products and minimal regulatory

risk.

3 September 2021

20

Healthcare | CRAMS/API – Consistency breeding stability

Growth in DFs accelerates post the second COVID wave

Overall growth in DFs sees a strong uptick in Jul’21



The growth rate in DFs has been on a downtrend over the last seven years, from

mid-teens to a low of 5.3% in Jul’20.



However, strong demand for COVID-related products and stability of Chronic

and sub-Chronic segments pushed growth to 12.8% on a MAT basis in Jul’21.



Growth in the Indian Pharma market (IPM) was driven by price growth (5.4%

YoY) and new product launches (4.1%), while volume growth picked up to 3.3%.

Exhibit 40: IPM growth accelerates with strong offtake of COVID-related products

IPM MAT Value (INR b)

14.1%

9.2%

6.6%

Growth YoY

12.8%

8.6%

8.3%

1,044

Jul-16

1,134

Jul-17

1,228

Jul-18

1,340

Jul-19

1,428

Jul-20

1,611

Jul-21

Source: MOFSL, AIOCD



According to an analysis by AIOCD, sale of drugs used in COVID-related

treatments (see Exhibit 2) constituted ~37% of IPM on a MAT basis in Jul’21.



The abnormal growth over the last 12 months is an aberration, driven by strong

offtake of COVID-related products. As the second COVID wave recedes in India,

volumes have started normalizing once again.

Exhibit 41: COVID-related products in IPM

Therapy

Drugs used in COVID-related treatments



Favipiravir, Remdesivir, Azithromycin, Hospital Anti-infectives, Amphotericin B,

Anti-Infectives

Ivermectin, Posaconazole, and Voriconazole



PPIs, Probiotics, Hepatic Protectors, Oral Electrolytes, Anti-Nausea agents, Anti-

Gastrointestinal

Spasmodic, and Anti-Diarrheals



Heparins, platelet aggregation inhibitors, Rivaroxaban, Apixaban, Dabigatran,

Cardiac

Ivabradine, Fondaparinux, Lipid lowering agents, and Antihypertensives

Anti-Diabetics



Insulin

Anti-Neoplastics



Dermatology and



Stomatological

Hormones



Antimalarials

Neurology/CNS

Pain

Respiratory

VMN











Tocilizumab and Baricitinib

Povidone Iodine mouthwashes and Disinfectants

Corticosteroids like Prednisolone, Methylprednisolone, and Dexamethasone

Hydroxychloroquine

Anti-Depressants and Tranquilizers

Anti-Inflammatory and Anti-Rheumatics

Cough and cold, Antitussives, and Bronchodilators

Multivitamins, Antioxidants, calcium, vitamin D3, appetite stimulants, and

protein supplements

Source: MOFSL, AIOCD

3 September 2021

21

Healthcare | CRAMS/API – Consistency breeding stability



Some of the largest contributors include Favipiravir, Remdesivir,

Hydroxychloroquine, Tocilizumab, Dexamethasone and multi-vitamins.



Upcoming products to aid the fight against COVID-19 include CIPLA’s antibody

cocktail of Casirivimab and Imdevimab, and Baricitinib; Zydus CDH’s Virafin;

DRRD’s 2DG; and Merck’s Molnupiravir.

Exhibit 42: Growth in Acute therapies accelerates YoY in Jul’21

Acute (%)

11.6

8.9

8.9

10.4

Chronic (%)

14.0

7.1

3.6

Jul-18

Jul-19

3.6

Jul-20

Jul-21

Source: MOFSL, AIOCD



Growth of Chronic therapies in IPM remained steady at 10.4% YoY on a MAT

basis in Jul’21, while Acute therapies saw a strong surge, accelerating to 14% in

Jul’21 from 3.6% YoY in Jul’20. The strong recovery in Anti-Infectives and VMN

contributed to this supernormal growth for Acute therapies.

Exhibit 44: Growth drivers for Chronic therapies

NP GR (%)

5.3

5.3

3.3

4.9

Vol GR (%)

5.2

Price GR (%)

4.9

NP GR (%)

5.1

Exhibit 43: Growth drivers for Acute therapies

Vol GR (%)

5.0

1.9

3.0

-0.5

Jul-19

1.9

-3.3

Jul-20

Jul-21

Source: MOFSL, AIOCD

4.7

Price GR (%)

5.0

2.0

2.0

Jul-18

4.1

2.0

2.4

2.0

Jul-20

2.8

2.4

-3.3

Jul-18

Jul-19

Jul-21

Source: MOFSL, AIOCD



The YoY growth in Acute therapies has been largely driven by new product

launches (5.3%) and price growth (5.3%), while volume growth recovered to

3.3% YoY on a MAT basis in Jul’21.



However, the YoY growth in Chronic therapies was driven by strong price

growth (5.1%) and a steady growth in new launches (2.8%) and volumes (2.4%).

3 September 2021

22

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 45: VMN, Anti-Infectives, and Gastrointestinal outperform IPM on a MAT basis in

Jul’21

21.5%

21.3%

17.9%

15.4%

13.5%

12.8%

7.0%

6.8%

5.7%

4.6%

3.2%

Source: MOFSL, AIOCD



Strong outperformances by VMN (~22% YoY) and Anti-Infectives (~21%) helped

push overall growth in IPM to 12.8% on a MAT basis in Jul’21. Both therapies

had slightly underperformed IPM on a MAT basis in Jul’20, suggesting robust

demand for COVID-related drugs during the last 12 months.



Anti-Neoplastics (7% YoY), Anti-Diabetic (6.8%), and Respiratory (3.2%)

therapies saw slower growth v/s IPM on a MAT basis in Jul’21.

Exhibit 46: IPM saw the launch of 69 new molecules over the last 36 months

Therapy

Anti-Infectives

Cardiac

Anti-Diabetic

Anti-Neoplastics

Ophthalmic

Pain/Analgesics

Gastrointestinal

Respiratory

Urology

Gynecological

New molecules launched

17

11

9

9

7

4

3

3

3

3

Sales of over INR50m on a MAT

basis in Jun’21

10

1

7

4

0

3

2

2

1

2

Source: MOFSL, AIOCD



Over the last 36 months, 69 new molecules were launched in IPM. Around 32 of

these molecules saw strong traction, with sales exceeding INR50m over the last

12 months.



Anti-Infectives (17), Cardiac (11), Anti-Neoplastics (nine), and Anti-Diabetic

(nine) saw the highest number of new launches. Anti-Infectives accounted for 10

launches, with strong traction, followed by Anti-Diabetic with seven successful

launches.



Anti-Infectives like Favipiravir (INR12.4b), Remdesivir (INR9.3b), and

Remogliflozin (INR1.2b) were the biggest new launches. Respiratory drug

Bilastine saw robust traction as well, recording sales of INR700m on a MAT basis

in Jul’21.



Upcoming new Generic launches in Anti-Diabetics include Sitagliptin and

Remogliflozin in CY22 and Empagliflozin and Linagliptin in CY23, with a

combined expected market size of INR22b.

3 September 2021

23

Healthcare | CRAMS/API – Consistency breeding stability



Sacubitril + Valsartan (CY23) and Apixaban (CY26) in Cardiac, and Perampanel

(CY21) in CNS are the other upcoming and significant Generic launches.

Company-wise MAT growth



During the past five years, TRP/DRRD/GNP/LPC has outperformed IPM, growing

15.8%/14.5%/12.9%/12.4% v/s a growth of 9.1% in the latter.



GLXO/ALPM/SUNP underperformed IPM, growing by 4.2%/4.9%/8.1%.

Exhibit 47: SUNP underperforms IPM due to lower growth in

Acute therapies

Sun Pharma MAT Value (INR b)

9.7%

Exhibit 48: CIPLA outperforms IPM, led by its top 25 brands

Cipla MAT Value (INR b)

Growth YoY

19.4%

Growth YoY

10.5%

10.1%

6.2%

6.6%

7.0%

10.5%

3.7%

10.7%

9.7%

6.2%

58

Jul-18

63

Jul-19

67

Jul-20

80

Jul-21

88

Jul-16

97

Jul-17

103

Jul-18

110

Jul-19

117

Jul-20

130

Jul-21

50

Jul-16

52

Jul-17

Source: MOFSL, AIOCD

Source: MOFSL, AIOCD

Exhibit 49: Growth in CDH driven by RSP and P/A

Zydus- Cadila MAT Value (INR b)

15.9%

10.0%

51

1.8%

43

Jul-16

50

Jul-17

Jul-18

55

Jul-19

59

Jul-20

67

Jul-21

9.1%

Growth YoY

13.3%

7.8%

Exhibit 50: LPC outgrew IPM led by AD, RSP, and Cardiac

Lupin MAT Value (INR b)

18.8%

13.7%

14.7%

11.7%

5.6%

34

Jul-16

38

Jul-17

45

Jul-18

52

Jul-19

54

Jul-20

61

Jul-21

11.8%

Growth YoY

Source: MOFSL, AIOCD; Note: RSP: Respiratory, P/A: Pain/Analgesics

Source: MOFSL, AIOCD; Note: AD: Anti-Diabetic

Exhibit 51: Growth in ALKEM driven by VMN and GI

Alkem MAT Value (INR b)

14.1%

9.6%

7.2%

4.1%

36

Jul-16

39

Jul-17

43

Jul-18

47

Jul-19

49

Jul-20

57

Jul-21

10.9%

Growth YoY

15.8%

Exhibit 52: TRP outperforms IPM, driven by Cardiac and CNS

Torrent MAT Value (INR b)

40.6%

41

Growth YoY

44

49

11.0%

24

Jul-16

11.7%

26

Jul-17

37

Jul-18

11.4%

7.1%

11.1%

Jul-19

Jul-20

Jul-21

Source: MOFSL, AIOCD; Note: GI: Gastrointestinal

Source: MOFSL, AIOCD

3 September 2021

24

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 53: WPL’s portfolio acquisition drives growth

Dr. Reddys MAT Value (INR b)

Growth YoY

36.3%

Exhibit 54: GNP outperforms IPM led by COVID-related sales

Glenmark MAT Value (INR b)

Growth YoY

33.9%

13.8%

6.5%

24

Jul-16

26

Jul-17

8.4%

28

Jul-18

11.0%

31

Jul-19

42

Jul-20

12.7%

47

Jul-21

15.4%

11.8%

27

Jul-17

28

3.9%

31

10.1%

33

7.0%

44

24

Jul-16

Jul-18

Jul-19

Jul-20

Jul-21

Source: MOFSL, AIOCD

Source: MOFSL, AIOCD

Exhibit 55: GLXO’s smaller brands impacts its sales

Gsk MAT Value (INR b)

8.3%

4.8%

1.6%

5.6%

Growth YoY

6.1%

Exhibit 56: Growth in IPCA led by Pain/Analgesic therapy

Ipca MAT Value (INR b)

Growth YoY

20.0%

9.8%

-2.8%

28.7%

22.4%

7.5%

-0.1%

36

Jul-18

39

Jul-19

39

Jul-20

41

Jul-21

15

Jul-16

33

Jul-16

34

Jul-17

16

Jul-17

16

Jul-18

20

Jul-19

22

Jul-20

26

Jul-21

Source: MOFSL, AIOCD

Source: MOFSL, AIOCD

Exhibit 57: ALPM grew slower due to growth stagnating in

the top 10 brands

Alembic MAT Value (INR b)

16.1%

15

15

3.6%

14

Jul-16

Jul-17

Jul-18

3.2%

17

Jul-19

9.1%

0.6%

Jul-20

Growth YoY

17

8.4%

18

Jul-21

Exhibit 58: Growth in AJP driven by Cardiac and OP

Ajanta MAT Value (INR b)

Growth YoY

45.0%

7

9.9%

6

Jul-16

Jul-17

Jul-18

Jul-19

8

8

7.6%

9

19.7%

5.3%

Jul-20

10

Jul-21

8.9%

Source: MOFSL, AIOCD

Source: MOFSL, AIOCD; Note: OP: Ophthalmology

Exhibit 59: Growth in JBCP driven by Cardiac and GI

Jb Chemicals MAT Value (INR b)

19.2%

Growth YoY

21.8%

11.1%

-2.3%

5

Jul-16

2.3%

5

Jul-17

2.4%

5

Jul-18

6

Jul-19

8

Jul-20

9

Jul-21

Exhibit 60: Growth in ERIS driven by AD and Cardiac

Eris Ls MAT Value (INR b)

13.5%

9.6%

Growth YoY

13.9%

11

Jul-18

12

Jul-19

14

Jul-20

16

Jul-21

Source: MOFSL, AIOCD; Note: GI: Gastrointestinal

Source: MOFSL, AIOCD; ; Note: AD: Anti-Diabetic

3 September 2021

25

Healthcare | CRAMS/API – Consistency breeding stability

Look out for structural changes in the DFs segment



Stringent localized and nationwide lockdowns over the last 15 months have

brought into focus digital marketing and virtual interactions with doctors.

Pharma companies in the IPM space are increasing leveraging these

technologies to overcome the challenges thrown up by the COVID-19 pandemic

and to improve the patient-doctor-MR connect.



e-pharmacies are looking to upend the market of Retail pharmacies, leveraging

technology, and burning cash to quickly expand and capture market share.

Prominent players like PharmEasy, 1MG, Medlife, and Netmeds are trying to

improve affordability and accessibility of medicines for their customers.

PharmEasy has recently announced its acquisition of Thyrocare Technologies,

marking its entry into Diagnostics as well.



The increasing share of trade generics and government initiatives like

Janaushadhi Kendras, which provide medicines at lower cost, are expected to

increase affordability of quality medicines and widen the reach of IPM.



The second COVID wave saw aggressive prescription of corticosteroids as an

Anti-Inflammatory drug for the treatment of COVID-induced symptoms.

Excessive use of these drugs in some cases has resulted in infections caused by

opportunistic fungi like mucormycosis. Prolonged use of corticosteroids can

sometimes induce diabetes in patients with no diabetic history.

3 September 2021

26

Healthcare | CRAMS/API – Consistency breeding stability

API: Supply disruption/Complex APIs are key growth levers







The API segment in India is in a sweet spot, with rising demand for novel therapeutics

as well as a reshuffle in the share of Chinese manufacturers.

Shutdown of manufacturing facilities on account of environmental concerns is driving

business opportunities for Indian API manufacturers.

The focus on Complex Formulations from innovators and Complex Generics by generic

Pharma companies is expected to drive faster growth for Complex APIs.

Multiple factors at play to drive API demand



Higher demand for

medicines from the US

and from emerging

countries to drive global

API sales



The size of the global API industry was estimated at USD180b in CY20. At an

estimated CAGR of 6.2% over the next five years, it would reach a market size of

USD260b by CY26E, led by: a) higher demand for medicines, especially in the US,

given its aging population, b) greater demand for medicines in developing

countries such as India, China, and Brazil due to increased affordability, and c)

loss of exclusivity of patented drugs during this period, leading to availability of

generics that are cheaper, yet more effective than existing drugs.

India API sales have grown at 18% CAGR over CY18-20 on a small base. India API

sales are expected to continue their outperformance (9.5% CAGR) over CY20-

26E.

Exhibit 61: Expect global API sales to grow at 6.2% CAGR over CY21-26E to USD260b

USA (USDb)

China (USDb)

EU5 (USDb)

India (USDb)

17.2

19.9

31.3

78.5

ROW (USDb)

16.8

21.9

33.2

84.4

16.5

24.1

35.1

90.7

28.4

9.3

21.4

51

52.9

CY18

25.8

10.1

23.3

54

58.6

CY19

22.6

11

25.2

58.8

63.7

CY20

18.6

15.3

26.5

63.2

68

CY21

17.6

16.6

28

67.9

72.2

CY22

17.7

18.1

29.6

73

76.9

CY23

81.9

CY24

87.2

CY25

92.9

CY26

Source: MOFSL, IQVIA



US has been the biggest API market globally in CY20 and is expected to continue

to remain the biggest market in CY26, closely followed by China. This is mainly

due to the higher proportion of domestic consumption of APIs in the US.

3 September 2021

27

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 62: US and China dominate the API market currently

Global API market share by geography (CY20)

ROW

India

13%

6%

China

32%

USA

35%

EU5

14%

Source: MOFSL, IQVIA

Exhibit 63: India and China to grow at the expense of the

RoW

Global API market share by geography (CY26E)

RoW

India

6%

9%

USA

36%

China

35%

EU5

14%

Source: MOFSL, IQVIA

Complex API space to witness sustainable growth as well as profitability



Focus on Complex

Generics and Complex

Formulations in branded

drugs to drive faster

growth in Complex APIs





Another interesting aspect is the fast growth (~9% CAGR) in Complex APIs over

CY21-26E v/s 6% for the industry. Complex APIs includes Injectable APIs,

Peptides, Oncology drugs, etc. Growth in this segment was mainly on account

of: a) innovators focusing on Complex Formulations in small molecules to avoid

generic competition even after losing exclusivity and/or patent expiry, and b)

focus on complex drugs by Generic companies to steer away from higher

competition and high erosion in traditional me-too drugs.

In the Complex API segment, Oncology APIs is expected to clock the fastest

growth (12.6% CAGR) over the next five years. Peptides/Injectable APIs are

expected to grow at 10.7%/6.4% CAGR.

As a result, proportion of Complex API sales in total API sales are expected to

increase to 62% in CY26E from 48% in CY18.

Exhibit 65: Estimate Complex APIs to account for ~62% of

total API sales in CY26E v/s 48% in CY18

Complex API as a % of total API sales

161

48%

54%

56%

57%

59%

60%

62%

Exhibit 64: Complex API market to grow at a faster rate than

the API market

Global complex API market (USDb)

78

87

94

103

113

123

134

147

51%

52%

CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26

Source: MOFSL, IQVIA

CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26

Source: MOFSL, IQVIA

China’s cost advantage depleting over the past two years



The value of APIs exported to the US from China was estimated ~USD4.2b – a

multi-fold increase ahead of India’s API exports to the US, which stood at

USD342m in CY19.

3 September 2021

28

Healthcare | CRAMS/API – Consistency breeding stability

Exhibit 66: India has more USFDA-compliant facilities than

China (Aug’19)…

Canada

RoW

2%

13%

China

13%

Exhibit 67: …yet China’s API exports to the US were 12x

those of India in CY19

API exports to USA in CY19

China (USDm)

India (USDm)

USA

28%

4,220

India

18%

EU

26%

CY19

Source: MOFSL, USFDA



342

Source: MOFSL, Company



Experts said that formulators are inclined to look at suppliers, excluding those

from China. Radical environmental policies are being implemented by China to

curb the high levels of pollution in the country.

This has led to the closure of almost 150 facilities, creating a vacuum in global

supply. This has translated to a price increase in commonly sourced

API/intermediates from China. The outbreak of the COVID-19 pandemic has

further intensified the disruption of supplies from China.

3 September 2021

29

Healthcare | CRAMS/API – Consistency breeding stability

Sector slightly above its 10-year valuation multiple









Indian Pharma companies saw their peak valuation of ~35x during the rally of

FY15-17. The rally was fueled by a boom in the US Generics market, with faster

approvals brought about by GDUFA.

With an increase in competition brought about by faster approvals, valuations

started to cool off beginning FY17. Increased regulatory risk in FY18-20 dealt a

blow to valuations, which bottomed out around Apr-May’21, exacerbated by

the uncertainties brought about by the COVID-19 pandemic.

Pharma companies were the least affected during the COVID-19 outbreak,

owing to their essential service status. The pandemic led to an increase in

margin, with savings on marketing, promotion, and travel expense in DFs due to

the lockdowns. This fuelled the rally in Pharma companies in FY21 and pushed

valuations slightly above their 10-year average of ~24x. Valuations also

expanded during this period due to low (non-existent) regulatory risk from plant

inspections, especially from the USFDA, as it halted all overseas inspections due

to COVID-related travel restrictions.

With USFDA slowly, but gradually, resuming plant inspections in India, we

expect some regulatory risk creeping in for companies with a presence in the US

Generics space. We expect a pick-up in higher margin non-COVID sales in the DF

segment, with a decline in cases countering the increase in regulatory risk.

Exhibit 68: Pharma companies are trading at an 7% premium

to their long-term average

40.0

30.0

24.1

20.0

15.4

10.0

18.8

P/E (x)

Min (x)

Avg (x)

+1SD

29.5

Max (x)

-1SD

34.6

25.7

Exhibit 69: P/B ratios are in line with their 10-year average

6.5

5.0

3.5

3.9

3.1

2.4

P/B (x)

Min (x)

Avg (x)

+1SD

4.7

3.9

Max (x)

-1SD

5.7

2.0

Source: MOFSL, Bloomberg

Source: MOFSL, Bloomberg

3 September 2021

30

Healthcare | CRAMS/API – Consistency breeding stability

Capability matrix









Based on our analysis of companies’ strength and their efforts towards

niche/differentiated product segments, we rank DIVI, GLAND, and SUNP at the top.

DIVI’s strength in Generic APIs and Custom Synthesis is unparalleled. It is already

working on six engines for sustainable growth.

GLAND ranks well on compliance, capabilities, and differentiated offering in the

Injectables and Sterile segment.

SUNP draws strength from its dominant position in DFs, and differentiated offering in

the global Specialty drugs segment.

Exhibit 70: DIVI, GLAND, and SUNP standout amongst peers in terms of differentiated offering

Differentiated

offering for the

US

Custom

Synthesis/CDMO

(API/Formulations)

Companies

SUNP

DIVI

DRRD

GLAND

CIPLA

CDH

ALKEM

LPC

ARBP

BIOS

LAURUS

SOLARA

India sales

US Generics

APIs

Compliance

☺☺☺☺

☺☺☺

☺☺☺

☺☺☺

☺☺☺

☺☺☺☺

☺☺

☺☺

☺☺

☺☺

☺☺☺☺

☺☺☺

☺☺☺

☺

☺☺☺

☺☺☺

☺

☺

☺☺☺

☺☺

☺☺☺☺

☺☺☺

☺☺☺

☺

☺☺☺

☺☺☺

☺☺

☺☺☺

☺

☺

☺☺☺

☺☺☺☺☺ ☺☺☺☺☺ ☺☺☺☺

☺☺

☺☺☺

☺

☺☺☺ ☺☺☺☺☺

☺

☺☺☺

☺

☺☺☺

☺

☺

☺☺☺☺

☺

☺☺

☺☺☺

☺

☺☺

☺☺

☺☺☺

☺☺☺

☺☺☺

☺☺☺

☺☺☺☺

☺☺☺

☺☺

☺☺☺

Source: MOFSL

3 September 2021

31

Healthcare | CRAMS/API – Consistency

September 2021

3

breeding stability

Update | Sector: Healthcare

Divi’s Laboratories

BSE SENSEX

58,130

S&P CNX

17,324

CMP: INR 5,210



TP: INR6,070 (+17%)

Buy

Six cylinder growth engine

Stock Info

Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

Free float (%)

DIVI IN

265

1383 / 18.9

5269 / 2987

-4/33/10

3460

48.1





DIVI is a strong player in Generic APIs, with a market leading position for ~60% of its

portfolio of ~30 molecules. In Custom Synthesis (CS), it works with innovators and big

Pharma companies right from the clinical stage to commercial production.

It is working on 16 new molecules in Generic APIs, which are at various stages of

development and will provide new growth opportunities in this segment. Capex of

~INR7b and new capex of ~INR6b at the Kakinada site will enable it to cater to the

increasing demand across all segments.

We expect 29% revenue CAGR over FY21-23E, with a growth of 21%/39% in Generic

APIs/CS over this period, and 36% earnings CAGR, aided by EBITDA margin expansion

of 270bp over FY21-23E.

Financials Snapshot (INR b)

Y/E MARCH

2021 2022E

69.7 89.6

Sales

29.0 38.9

EBITDA

20.1 27.8

Adj. PAT

EBIT Margin (%)

37.9 40.0

75.6 104.8

Adj. EPS (INR)*

54.4 38.6

EPS Gr. (%)

350.1 424.1

BV/Sh. (INR)

Ratios

Net D:E

-0.2

-0.2

24.2 27.1

RoE (%)

24.2 27.1

RoCE (%)

Payout (%)

32.3 29.8

Valuations

P/E (x)

68.8 49.6

EV/EBITDA (x)

46.8 34.8

Div. Yield (%)

0.4

0.5

FCF Yield (%)

1.0

1.0

EV/Sales (x)

19.5 15.1

*

Cons.

2023E

115.0

50.6

37.0

41.1

139.4

33.0

521.9

-0.3

29.5

29.5

29.8

37.3

26.5

0.7

2.3

11.6

Six growth engines for sustainable growth











Shareholding pattern (%)

As On

Jun-21 Mar-21 Jun-20

Promoter

52.0

52.0

52.0

DII

16.6

16.7

16.8

FII

20.6

19.9

18.2

Others

10.9

11.5

13.1

FII Includes depository receipts









After mastering Generic APIs, DIVI is now deploying six growth engines for

long-term sustained growth. These are as follows:

A)

Capacity expansion

is in line with industry growth for

established products,

where DIVI has a leading (60-70%)

market share.

These are products where it

has legacy strength and constitute a substantial portion of its Generic APIs.

B) DIVI would

ramp up sales,

along with increasing capacity, in

generic

molecules,

where it has

20-30% market share.

It would leverage its business

development expertise and manufacturing efficiency to grow this segment.

C)

Sartans:

With KSMs being made in-house to tackle the NDMA impurity issue,

DIVI would be in a strong position to gain market share through increased

capacity and from the addition of more Sartans molecules. Complemented by

scale, this would help the company gain market share in Sartans.

D) It has increased traction in the

Contrast Media

space in CS and Generic API

segments. It already has a few products in this space and is working with an

innovator on another Iodine-based Contrast Media product, leveraging its

chemistry skill sets.

E)

Two new CS projects

(in addition to Molnupiravir), which are large long-

term contracts, and scale-up in the same would provide further business

opportunities. DIVI is working on these projects on a fast-track basis.

F) There are opportunities in

new generic products,

whose patents are expiring

over FY23-25, which require differentiated technology/process innovations.

DIVI has already developed these and would launch the same post patent

expiry.

In addition to development, DIVI is also investing in creating capacities for

these six engines, some of which are currently underway. These growth

engines, along with investments, would aid in sustainable growth over the

medium term.

Its strength and scale are expected to drive 21%/39% sales CAGR in the Generic

API/CS segment to INR53b/INR55b over FY21-23E.

3 September 2021

32

Healthcare | CRAMS/API – Consistency breeding stability

Revenue by segment (FY21)

Neutraceuticals

9%

Capex benefits kicking in, new growth capex for future opportunities





Custom

Synthesis

40%

Generic API's

51%



DIVI has spent ~INR25b on capex since FY18. Capex worth INR5b is currently in

progress and will be completed in FY22.

Legal hurdles are now behind at the Kakinada site. It expects construction to

begin in 2QFY22, with an initial outlay of INR6b and an expected total outlay of

INR10-20b over the next 2-3 years.

The Kakinada expansion is for products, in addition to the six growth levers. DIVI

intends to be future ready, with the timely deployment of capital.

Valuation and view





We expect 36% earnings CAGR over FY21-23E, led by higher business prospects

from CS and Generics, benefit from Molnupiravir supply to the innovator,

improved growth in Nutraceuticals, new product additions in the near term, and

~240bp margin expansion on process and productivity improvements.

We continue to value DIVI at 36x 12-month forward earnings to arrive at our TP

of INR6,070. We reiterate our BUY rating.

3 September 2021

33

Healthcare | CRAMS/API – Consistency breeding stability

Story in charts

Exhibit 71: Expect ~28% revenue CAGR over FY21-23E

Sales (INRb)

27.1

7.6

-4.3

37.8

FY16

40.6

FY17

38.9

FY18

49.5

FY19

53.9

FY20

69.7

89.6

115.0

14.2

FY16

14.5

FY17

12.6

FY18

18.7

FY19

18.4

FY20

29.0

38.9

50.6

9.1

YoY Growth (%)

29.2

28.5

28.3

37.5

Exhibit 72: Expect margin to expand by 240bp over FY21-23E

EBITDA (INRb)

EBITDA Margin (%)

41.6

34.1

43.4

44.0

21.2

35.6

37.8

32.4

FY21 FY22E FY23E

Source: Company, MOFSL

FY21 FY22E FY23E

Source: Company, MOFSL

Exhibit 73: Expect 36% earnings CAGR over FY21-23E

EPS (INR)

139.4

104.8

75.6

42.3

39.9

50.0

32.9

48.9

Exhibit 74: Expect RoCE to continue to improve over FY21-

23E

RoCE (%)

28.7

21.8

15.4

24.2

20.4

18.1

27.1

29.5

FY16

FY17

FY18

FY19

FY20

FY21 FY22E FY23E

Source: Company, MOFSL

FY16

FY17

FY18

FY19

FY20

FY21 FY22E FY23E

Source: Company, MOFSL

3 September 2021

34

Healthcare | CRAMS/API – Consistency breeding stability

Financials and valuations

Income Statement

Y/E March

Total Income from Operations

Change (%)

Total Expenditure

% of Sales

EBITDA

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income

PBT bef. EO Exp.

EO Items

PBT after EO Exp.

Total Tax

Tax Rate (%)

Reported PAT

Adjusted PAT

Change (%)

Margin (%)

Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Total Loans

Deferred Tax Liabilities

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Capital WIP

Total Investments

Curr. Assets, Loans & Adv.

Inventory

Account Receivables

Cash and Bank Balance

Loans and Advances

Curr. Liability & Prov.

Account Payables

Other Current Liabilities

Provisions

Net Current Assets

Appl. of Funds

FY17

40,643

7.6

26,183

64.4

14,460

35.6

1,233

13,227

23

737

13,942

12

13,953

3,349

24.0

10,604

10,595

-5.7

26.1

FY18

38,915

-4.3

26,298

67.6

12,617

32.4

1,425

11,192

13

1,090

12,269

44

12,313

3,543

28.8

8,770

8,739

-17.5

22.5

FY19

49,463

27.1

30,744

62.2

18,719

37.8

1,689

17,030

35

1,220

18,215

336

18,551

5,023

27.1

13,527

13,282

52.0

26.9

FY20

53,944

9.1

35,523

65.9

18,422

34.1

1,862

16,559

61

1,075

17,573

-621

16,952

4,429

26.1

12,523

12,991

-2.2

24.1

FY21

69,694

29.2

40,711

58.4

28,983

41.6

2,556

26,427

9

626

27,044

-384

26,660

6,818

25.6

19,843

20,062

54.4

28.8

FY22E

89,584

28.5

50,704

56.6

38,879

43.4

3,054

35,825

5

896

36,716

196

36,912

8,970

24.3

27,943

27,808

38.6

31.0

(INR m)

FY23E

114,965

28.3

64,380

56.0

50,585

44.0

3,370

47,215

0

1,150

48,364

0

48,364

11,366

23.5

36,999

36,992

33.0

32.2

FY17

531

53,043

53,574

357

1,228

55,160

17,940

2,348

15,592

4,436

16,307

25,215

13,199

9,009

787

2,220

6,390

4,713

1,511

166

18,825

55,160

FY18

531

58,717

59,248

631

1,917

61,796

23,735

3,773

19,962

1,198

18,893

27,796

13,507

10,144

1,125

3,021

6,053

4,327

1,540

186

21,743

61,796

FY19

531

69,041

69,572

1,056

2,188

72,816

26,339

5,462

20,878

4,919

19,456

35,106

17,723

11,634

1,153

4,597

7,543

5,320

2,039

185

27,563

72,816

FY20

531

72,568

73,099

389

2,696

76,184

35,143

7,324

27,819

9,197

9,714

38,584

18,639

14,134

1,226

4,586

9,130

6,626

2,174

329

29,455

76,184

FY21

531

92,415

92,946

4

3,348

96,298

46,919

9,880

37,039

7,106

0

63,563

21,452

16,765

21,560

3,786

11,411

7,632

3,501

278

52,153

96,298

FY22E

531

112,034

112,565

4

3,348

115,917

56,604

12,934

43,670

5,421

0

81,188

29,172

22,089

25,061

4,866

14,362

9,505

4,500

357

66,826

115,917

FY23E

531

138,012

138,542

4

3,348

141,894

65,941

16,304

49,637

6,084

0

104,047

29,985

27,403

40,415

6,245

17,874

11,641

5,775

458

86,173

141,894

3 September 2021

35

Healthcare | CRAMS/API – Consistency breeding stability

Financials and valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

Cash P/E

P/BV

EV/Sales

EV/EBITDA

Dividend Yield (%)

FCF per share

Return Ratios (%)

RoE

RoCE

RoIC

Working Capital Ratios

Asset Turnover (x)

Inventory (Days)

Debtor (Days)

Creditor (Days)

Leverage Ratio (x)

Net Debt/Equity

Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Depreciation

Interest & Finance Charges

Direct Taxes Paid

(Inc)/Dec in WC

CF from Operations

Others

CF from Operating incl EO

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Inc/(Dec) in Debt

Interest Paid

Dividend Paid

CF from Fin. Activity

Inc/Dec of Cash

Opening Balance

Closing Balance

Forex and other adjustments

Total Cash & Cash Eq

FY17

39.9

44.6

201.8

10.0

30.1

130.2

116.6

25.7

33.9

95.4

0.2

29.1

22.0

21.8

30.3

0.7

119

81

42

-0.3

FY18

32.9

38.3

223.2

10.0

36.4

157.8

135.7

23.3

35.4

109.3

0.2

18.9

15.5

15.4

21.5

0.6

127

95

41

-0.3

FY19

50.0

56.4

262.1

10.0

23.7

103.8

92.1

19.8

27.9

73.7

0.2

8.3

20.6

20.4

28.3

0.7

131

86

39

-0.3

FY20

48.9

56.0

275.4

16.0

40.9

106.2

92.9

18.9

25.6

74.8

0.3

1.2

18.2

18.1

23.7

0.7

123

96

45

-0.1

FY21

75.6

85.2

350.1

20.0

32.3

68.8

61.0

14.8

19.5

46.8

0.4

39.1

24.2

24.2

31.8

0.7

112

88

40

-0.2

FY22E

104.8

116.3

424.1

26.0

29.8

49.6

44.7

12.3

15.1

34.8

0.5

41.2

27.1

27.1

35.4

0.8

119

90

39

-0.22

(INR m)

FY23E

139.4

152.0

521.9

34.4

29.8

37.3

34.2

10.0

11.6

26.5

0.7

95.0

29.5

29.5

39.9

0.8

95

87

37

-0.3

(INR m)

FY23E

48,364

3,370

-1,149

-11,366

-3,993

35,226

0

35,226

-10,000

25,226

0

1,150

-8,850

0

0

-11,021

-11,021

15,354

25,061

40,415

40,415

FY17

13,953

1,233

-32

-3,017

-371

11,766

-262

11,504

-3,767

7,737

-8,289

659

-11,396

0

-23

0

24

132

734

866

-79

787

FY18

12,313

1,425

-30

-2,686

-2,191

8,831

-1,073

7,759

-2,738

5,021

-2,559

513

-4,784

0

-13

-3,192

-3,142

-167

787

620

504

1,124

FY19

18,551

1,689

-40

-4,844

-4,998

10,357

-814

9,543

-7,331

2,213

-291

767

-6,854

776

-35

-3,200

-2,459

230

1,124

1,354

-201

1,153

FY20

16,952

1,862

-6

-4,452

-2,183

12,174

-14

12,160

-11,829

331

10,336

658

-835

-612

-61

-10,241

-10,914

411

1,153

1,564

-337

1,227

FY21

26,660

2,556

-564

-6,443

-2,641

19,569

-100

19,469

-9,101

10,368

9,740

112

751

-333

-9

0

-349

19,871

1,227

21,097

463

21,560

FY22E

36,912

3,054

-891

-8,970

-11,173

18,933

0

18,933

-8,000

10,933

0

896

-7,104

0

-5

-8,324

-8,329

3,500

21,560

25,061

25,061

3 September 2021

36