Sector Update | 19
Update| Healthcare
Sector
November 2019
Healthcare
Performance of top companies:
October 2019)
Company
MAT Oct- 19
gr (%)
(%)
IPM
9.2
5.1
Pfizer
7.4
17.7
Dr Reddy Labs
13.2
17.5
JB chemicals
21.6
14.7
Glenmark Pharma 8.9
9.2
Lupin
14.7
9.0
Sun Pharma
7.6
6.8
Zydus Cadila
10.1
7.0
Abbott
9.5
6.9
Mankind
12.7
5.6
Torrent Pharma
10.1
4.8
Biocon
12.3
3.6
Alkem
11.8
2.5
Sanofi
11.8
2.2
Cipla
8.0
2.0
Ipca Labs
15.4
1.2
Merck
3.2
-0.2
AstraZeneca
8.9
-1.2
GSK Pharma
11.3
-1.6
Ajanta Pharma
5.9
-2.3
Alembic Pharma
5.6
-3.4
Natco
6.6
-13.4
Sales growth in low single-digits despite reasonable base
Indian pharmaceutical market’s (IPM) secondary sales hit single-digit growth of
5.1% YoY in Oct’19 (v/s 11.9% YoY in Sep’19 and 9.5% YoY in Aug’19), despite a
reasonable base (12.5% YoY growth in Oct’18). Volumes declined 2.7% YoY in
Oct’19 (lower than 12-month rolling average of 1.5% and v/s 3.5% in Sep’19).
Price growth remained steady at 5.1% YoY while new launch growth was 2.5%
YoY.
For three months ended Oct’19, growth was 8.8% YoY. Overall growth was
driven by 5.6% YoY increase in prices and 2.6% YoY rise in new launch growth.
Volume growth at 0.7% (v/s 3.2% in 2QFY20) dragged overall growth. Notably,
both national list of essential medicines (NLEM) products/Non-NLEM products
reported growth of 10.4%/8.6% YoY for the quarter.
On MAT basis, industry grew 9.2% YoY with price growth of 5.2% YoY, volume
growth of 1.4% YoY and new launch growth of 2.6% YoY.
In value terms for secondary sales, NLEM (~10% of IPM) growth came in at 5.3%
YoY, while Non-NLEM (~86% of IPM) grew 5.1% YoY in Oct’19.
Growth in NLEM products was driven by prices (+4.4% YoY) and new products
(+0.4% YoY). Volume growth for NLEM products was +0.5% YoY in Oct’19.
For Oct’19, Pfizer (+17.7% YoY) exhibited highest YoY growth, followed by Dr.
Reddy (+17.5% YoY) and JB Chemical (+14.7% YoY).
Pfizer’s performance can be attributed to strong double-digit growth in its top
brands, especially in Anti-Infective/Hormones (+29.2%/+27.1 YoY). JB Chemicals
was supported by strong growth in Cardiac (+26.7% YoY). Gastro intestinal/
Derma (+22%/+20.4% YoY) drove Dr. Reddy’s growth.
Sun Pharma’s sales were impacted sequentially and grew 6.8% YoY (v/s 13.1%
YoY in Sep’19), mainly dragged by muted +4.4% YoY growth in Neuro/CNS.
Secondary sales declined for Ajanta (-2.3% YoY), Alembic (-3.4% YoY), and Natco
(-13.4% YoY) for Oct’19.
On MAT basis, JB Chemicals/Torrent reported highest price growth of 9.1%/8.1%
YoY. AstraZeneca delivered highest growth in new product launches at +5.3%
YoY.
Cardiac (~12.5% of IPM) exhibited highest YoY growth (+7.9%) among therapies
in Oct’19. This was followed by growth in Anti-Diabetics (9.8% of IPM) at 6.4%
YoY and Neuro/CNS (6% of IPM) at 6.1% YoY. Anti- Infective (13.4% of IPM) and
Vitamin/Mineral/Nutrients (VMNs; 8% of IPM) grew moderately at ~2.9%/2.3%
YoY for Oct’19.
Price – Key growth driver; Volumes drag overall growth
Pfizer, Dr. Reddy, JB Chemicals – Outperformers for Oct’19
Anti-infective/VMNs drag growth in terms of therapies
Tushar Manudhane – Research analyst
(Tushar.Manudhane@MotilalOswal.com); +91 022 6129 1536
Hitakshi Chandrani – Research analyst
(Hitakshi.Chandrani@motilaloswal.com); +91 22 6129 1557
19 November 2019
1
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