Sector Update | 10 June 2020
Sector Update| Healthcare
Healthcare
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IPM on the decline in May’20 as well, but gradual recovery visible
Performance of top companies:
May 2020
Company
IPM
Ipca
Mankind
Astrazeneca
USV
Natco
Pfizer
JB Chemicals
Eris LS
Merck
Intas
Sun Pharma
MAT
May-20
gr (%)
(%)
8.1
5.7
8.0
2.7
-2.8
8.7
0.2
9.6
4.6
-8.9
8.2
7.9
-8.9
7.1
6.2
4.8
3.9
2.1
-0.1
-2.1
-4.7
-4.9
-5.4
-7.2
While the IPM was down 8.9% YoY for May’20, gradual improvement has been
witnessed v/s Apr’20, wherein growth in IPM was down 11.2%. Decline in
volumes by 14.4% YoY dragged down growth, while price growth came in at
4.3% YoY.
For the quarter-ended May’20, overall decline stood at 3.9% YoY, led by sharp
decline in volumes (-10.2% YoY); conversely, prices and NP grew at 4.6% and
1.6%, respectively. NLEM and non-NLEM products declined 1.8% and 4.3% YoY,
respectively.
On a MAT basis, industry growth came in at 6.4% YoY.
In value terms, secondary sales declined 7.8% YoY for NLEM (~16% of IPM) and
9.2% YoY for non-NLEM (~84% of IPM) in May’20.
While price growth for non-NLEM products was 4.3% YoY, volumes declined
14.8% YoY. NLEM products were also dragged down by volumes (-10.7% YoY).
In May’20, Ipca (+7.1% YoY), Mankind (+6.2% YoY), and AstraZeneca (+4.8% YoY)
delivered growth, while the sales of most other companies declined.
Ipca witnessed good traction in Anti-Malaria (+45%YoY) and Anti-Neoplastics
(+22.4%YoY) therapies. Mankind’s growth was supported by growth in both
volumes (+3.8%) and prices (+4.6%). AstraZeneca’s growth was supported by
strong growth in Respiratory, Anti-Diabetic, and Anti-Neoplatics therapies.
Sun Pharma’s sales declined to further lower levels of 7.2% v/s decline of 5.7%
YoY in Apr’20, primarily due to lackluster performances in most of its key
therapies, such as Gastro, Anti-Infective, Anti-Diabetic, and Pain/Analgesics.
Secondary sales for GSK, Biocon, and Wockhardt were the weakest.
On a MAT basis, JB Chemicals / Torrent reported the highest price growth of
9.2%/7.8% YoY. Glenmark saw the highest growth in new launches (+4.8% YoY).
Cardiac and Anti-Diabetic therapies have grown to some extent (+2.9% YoY /
0.9% YoY), while other therapies have shown decline on a YoY basis for May’20.
Therapies such as Anti-Infective (11% of IPM), Gastrointestinal (11% of IPM),
and Respiratory (6% of IPM) declined 23.3% YoY, 11.6% YoY, and 15.9% YoY,
respectively.
On a MAT basis, Respiratory, Anti-Malaria, Cardiac, and Anti-Diabetic therapies
exhibited the highest growth of 11.6% YoY, 11.3% YoY, 10.6%YoY, and 9.8% YoY,
respectively, in May’20. On the other hand, Derma (+2.4% YoY) and Gynaec
(+1.1% YoY) posted disappointing growth.
Price growth offset by decline in volumes
Ipca, Mankind, and AstraZeneca emerge as outperformers
Ajanta
Glenmark
MSD
Abbott
Sanofi
Lupin
Torrent
Cadila HC
Dr. Reddys
Indoco
Cipla
FDC
-0.7
-10.9
10.9
7.5
9.1
9.6
9.9
4.3
7.2
-2.4
9.6
1.1
-6.5
-6.6
-7.0
-7.7
-8.0
-8.2
-8.8
-9.2
-9.8
-12.6
-12.9
-13.6
Cardiac/Anti-Diabetic off-take better than other therapies for May’20
Alkem
Alembic
Emcure
GSK
Biocon
Wockhardt
10.6
2.5
9.4
10.0
-2.4
16.7
-13.7
-13.8
-14.5
-16.5
-20.6
-23.3
Research analyst – Tushar Manudhane
(Tushar.Manudhane@MotilalOswal.com); +91 022 6129 1536
Hitakshi Chandrani
(Hitakshi.Chandrani@MotilalOswal.com); +91 22 6129 1557 |
Bharat Hegde
(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.