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IPM Pulse: IPM takes a breather

The IPM growth in October took a breather with 3%YoY growth. As per IQVIA, Oct’22 had a negative volume growth of -6%YoY (vs. -4% MoM) with positive growth coming from price and new introductions (NI). Oncology (+23%) was the only top therapy with double digit growth followed by Urology (+8.1%) and Gynaec (+7.7%) which were the top performers while Anti-infectives (-1%) and Respiratory (1%) were the top laggards. Chronic (7%YoY) outperformed acute therapies by 6% which was at 1%. In Oct’22 month, Natco (+14%YoY) and JB Pharma (+16%) were the top performers in the listed universe followed by Alkem (9%), Ajanta (8%) and GSK (+7%). Dr Reddy’s (-2%) and Lupin (2%) continue to underperform IPM. Indian companies grew 3%YoY while MNCs grew 1%YoY in Oct’22 as performance gap narrows MoM. All listed companies (except Natco) reported negative volume growth, due to the high base which should start improving in the coming months. The WPI linked price increase is reflecting in the IPM and given the ongoing trend the WPI index remains inflated at 14% TTM average basis for FY23. This will support the price growth in IPM in FY24E as well. Generally Q3 tends to be softer quarter from growth perspective in IPM.

* Volume growth negative, Price and NI sustaining positive IPM growth: IPM growth of 6% based on MAT Oct’22 was driven by price growth of 4.8%, NI growth of 2.4% and negative volume growth of -1.3%. Volume growth in Oct’22 continued to decline to - 5.7%YoY (vs. -3.6%MoM). AI (-8.6%), GI (-9.2%) and VMN (-7.9%) are top therapies dragging volume growth largely driven by the seasonality of the acute therapies. Price hikes including NLEM WPI linked price increase (+10.7%) is supporting IPM growth. Except Natco, no listed company reported positive volume growth in Oct’22- which could also be due to high base last year, seasonality in acute therapies and festivities during the quarter.

* Oncology growth remains robust: Chronic therapies (+7%YoY) clearly outperformed acute by 6% in Oct’22. Oncology (+23%YoY) was the only therapy with double digit growth which was followed by Urology (+8.1%), Gynaec (+7.7%), Opthal (+7.6%), Cardiac (+12%) and Gastro Intestinal (+10%) were top performers in Sep’22. On the contrary, Anti-infectives (-1%) and Respiratory (+2%) were the top laggards – dragging down overall market growth. This could be due to Covid tailwinds in the base. Despite negative AI growth this month, Alkem outperformed with 6%YoY growth whilst GSK grew 18%YoY in AI. Cipla continued to outperform Respiratory market growth which grew 9%YoY (vs. 2% market growth).

* Sun, Cipla, Torrent, IPCA outperform IPM but growth slows: Based on Oct’22 MAT IPM data, Sun retained its top spot having 7.7% market share. While on a MAT basis, there were no change in rankings, Dr Reddy’s improved its rank by 1 in Oct’22. From our coverage, IPCA, Sun, Torrent and Cipla have grown 6%/5%/4%/4% respectively while Dr Reddys and Lupin underperformed reporting -2% and 2% growth respectively. Among MNCs, Abbott and GSK reported positive growth of 3%/7% whereas Sanofi and Pfizer reported negative growth of -2%/-7% YoY respectively. JB Pharma reported 16%YoY growth in Oct’22.

* Oct’22 Top brands performance: SUNP’s top 50 brands have grown in mid single digits in Oct’22. Cipla’s Top 26-50 brands have reported negative growth of 7% whilst top 10 brands continued growing in double digits. Lupin’s top 50 brand performance has been in low single digits whereas Dr Reddy’s brand performance has been mixed (top 25 growing), however overall growth (-2%) dragged down by the Top 26 -50 brands (-6%). Torrent’s Top 50 brands have grown at mid single digits, with top 10 brands driving growth at 7%. Zydus’ growth was driven by top 10 brands (9%YoY in Oct’22). Ipca’s top 10 brands led by Zerodol franchise grew at a robust 13%YoY in Oct’22 although lacklustre growth in Top 25-50 brands (-6%) dragged overall performance. Alembic’s top 11-25 brands reported -1% growth although the Top 10 and Top 26-50 brands grew 13%/ 10% respectively. Natco’s 14% growth was driven by Top 11-50 brands’ growing at healthy double digits in Oct ’22.

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