Published on 14/02/2017 5:32:47 PM | Source: Religare Capital Markets Ltd
India PharmaScope - Convalescing post-demonetisation - RCML
Growth in the Indian Pharmaceutical Market (IPM) recovered to 10.1% YoY in Jan’17 from 7.2% in Dec’16, driven by a volume uptick as demonetisation headwinds receded. Despite improved pricing, NLEM revenues fell 5.5% YoY (-9% in Dec’16) as volumes dropped. While the FDC market remains in pain (-34%), the non-NLEM and non-FDC segments improved. Therapy-wise, antidiabetic drug sales grew at a healthy 19% YoY and the dermatology and gynaecology segments outperformed the IPM by 490-520bps. Among key players, CDH, TRP and GNP outperformed the market (16-19% growth), whereas DRRD, NTCPH and CIPLA were laggards.
* IPM growth normalises:
According to AIOCD AWACS, the domestic pharma market witnessed a slow pick-up in growth to 10.1% in Jan’17 from 7.2% YoY in Dec’16, reflecting the fading impact of demonetisation. The uptick was mainly supported by volume growth of 5.1%, up from 1.8% in Dec’16. On the other hand, the contribution from new introductions and price hikes was broadly unchanged at 3.2%/2%.
* NLEM and non-NLEM segments improve marginally:
NLEM growth improved but remained in negative territory at -5.5% YoY (-9% in Dec’16). Price hikes at 5.1% failed to offset the volume decline of -11% (+1% in Dec’16). In the non-NLEM segment, volume growth of 4.7% YoY (1.5% in Dec’16) drove revenues up 12.7% (from 9.8%). Price hikes for the non-NLEM segment were in line with Dec’16 (4.2%) as was the contributions from new launches. Revenue growth in the NLEM/nonNLEM categories stood at +10.3%/-4.5% YoY for Indian companies and +9.2%/-8.3% for MNCs.
* FDC market still in pain:
FDC market revenues plunged 33.6% YoY in Jan’17, mainly on account of a sudden drop in volumes. Growth in the non-FDC market increased to 11.5% YoY from 8.4% in Dec’16. FDC portfolios for Indian/MNC companies declined further by 34.5%/31.3% YoY.
* Key segments outperform:
Anti-diabetic sales (~9% of IPM) grew at a solid 19% YoY; the dermatology/gynaecology segments (~11% share) grew at a healthy ~15%. The vitamin + supplements, GI and cardiac segments (together contributing 33% share) grew at 8.4%, 12.9% and 11.3% respectively. However, the anti-infective and respiratory segments (~22% share) posted distressed growth, falling below the IPM by 850-1,400bps, and the pain & analgesics and neurology & CNS segments (~13% share) merely grew at 6-6.5%.
* CDH, TRP and GNP outperform:
CDH saw strong sales growth of 19% YoY and TRP and GNP outperformed the IPM by 560-690bps, while SUNP was broadly in line with the IPM. In contrast, DRRD remained at the bottom of the pack (+0.3%), while CIPLA/NTCPH/LPC were 150-580bps below IPM growth.
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