Sector Update | 12 March 2020
Sector Update| Healthcare
Healthcare
Performance of top companies:
February 2019
Company
IPM
Natco
Dr. Reddy’s
Mankind
FDC
Torrent
USV
Eris LS
Glenmark
Emcure
AstraZeneca
Ajanta
Pfizer
Intas
JB Chemicals
Alkem
Lupin
Ipca
Sun Pharma
Cadila HC
Cipla
Sanofi
Abbott
Indoco
Merck
GSK
Wockhardt
Alembic
MSD
Biocon
MAT
Feb-20
gr (%)
(%)
9.7
1.0
18.9
13.5
9.4
12.1
8.6
11.4
10.5
14.6
8.3
6.8
10.3
13.5
21.1
12.8
11.8
9.8
9.3
12.0
7.9
7.9
8.6
11.6
2.5
10.5
-9.1
3.3
3.2
4.9
12.1
24.7
21.4
19.1
18.3
17.4
16.6
16.3
15.6
14.6
14.4
14.4
14.0
14.0
13.9
13.6
13.4
12.2
11.1
11.7
10.4
10.0
9.4
8.3
8.0
7.9
6.9
6.1
-4.5
-6.1
Volume growth revives; Sustainability remains key monitorable
Indian pharmaceutical market (IPM) growth stood at 12.1% YoY in Feb’20 (v/s
7.6% YoY in Jan’20). Growth was led by prices (+5.4% YoY) and new launches
(+2.9% YoY). Volumes also improved 3.8% YoY in Feb’20.
For the quarter ended Feb’20, overall growth came in at 9.5% YoY, led by prices
(+5.3% YoY) and new launches (+2.7% YoY). Volume growth for the quarter was
relatively low at 1.4% YoY due to dismal momentum in Dec’19/Jan’20. Notably,
both NLEM/non-NLEM products grew 9.2%/9.5% YoY.
On MAT basis, industry growth came in at 9.7% YoY, price growth at 5.4% YoY,
new product growth at 2.5% YoY and volume growth at a mere 1.9% YoY.
In value terms, secondary sales increased 12% YoY for NLEM (~10% of IPM) and
non-NLEM (~86% of IPM) in Feb’20.
Price growth for non-NLEM products was 5.7% YoY in Feb’20. Growth in NLEM
products was driven by volumes (+7.6% YoY) followed by prices (+3.8% YoY).
In Feb’20, Natco (+24.7%), Dr. Reddy’s (+21.4% YoY) and Mankind (+19.1%)
delivered highest growth.
Natco witnessed good traction in volumes (+7.6% YoY). Dr. Reddy’s performance
was driven by strong double-digit growth in its top therapies, especially in
Respiratory/ Anti-infective (+29.2%/+24.4 YoY).
Sun Pharma’s sales grew 14.4% in Feb’20 from 10.3% in Jan’20, mainly due to
better performance of Anti-infective (+21.2% YoY).
Secondary sales declined for MSD and Biocon.
On MAT basis, JB Chemicals/Torrent reported highest price growth of 8.9%/8.2%
YoY. Glenmark saw highest growth in new launches (+4.6% YoY).
Among the top-10 therapies, Respiratory therapy exhibited highest YoY growth
of 17.9%, followed by Anti-infective (+14.1%) in Feb’20. Other therapies like
Pain-Analgesics, VMN, Anti-Diabetic and Gastro-intestinal grew slightly below
industry average at 11.8%, 11.2%, 11% and 10.9% YoY, respectively.
In Feb’20, Indian companies grew at a better rate (+13.2% YoY) than MNCs
(+7.6% YoY).
Also, for the quarter ended Feb’20, Indian companies grew at 10.6% YoY (MNCs:
+5.2% YoY).
On MAT basis, Indian companies grew 10% YoY (MNCs: +8.3% YoY).
Price – key growth driver; volumes improve as well
Natco, Dr. Reddy, Mankind emerge as outperformers
Respiratory/Anti-infective – growth drivers on therapy front
Indian companies continue exhibiting healthy growth compared to MNCs
Tushar Manudhane – Research analyst
(Tushar.Manudhane@MotilalOswal.com); +91 22 6129 1536
Hitakshi Chandrani – Research analyst
(Hitakshi.Chandrani@MotilalOswal.com); +91 22 6129 1557
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.