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The IPM growth improved sequentially to 6.4%YoY in Jul’23 (vs. 5.1% MoM); nonetheless, remains tepid due to delayed seasonality. IPM grew 10.5%YoY based on MAT Jul’23 driven by 4.8% price, 2.9% volume and 2.7% NI growth. We expect growth to pick up in Aug’23. While monthly volumes are yet to sustain positive momentum, we believe FY24 could deliver 2-4% volume growth. Acute therapies with 4%YoY growth lagged chronic therapies by 6%. All top therapies except AI and Respiratory reported positive growth primarily led by Opthalmology (+30%), Oncology (+26%), Urology (+16%) and Cardiac (+11%). Top performers in the listed universe were Ajanta (+12%), JB Pharma (+11%) and Eris (+10%). Our coverage outperformers were SUNP, TRP and LPC while ZYDUSLIF and Cipla were in line with the IPM. Overall, we expect our coverage universe to deliver double digit domestic growth. Reported growth of companies reflect price revision impact for drugs under DPCO (~19% of IPM) gradually offset by WPI linked price increases (~12%) wef Apr’23. We believe price growth of 5-7%, NI of 2-3% and volume growth of 2-4% will drive FY24 IPM growth of early double digits.

* SUNP, IPCA shine, TRP growth slow: Based on Jul’23 MAT IPM data Sun retained its top spot with 8% market share (ms). In Jul’23, Sanofi, ALPM and JB Pharma improved their rank by 1 each to 18/20/23 respectively whereas IPCA improved its rank by 2 to 15. From our coverage, SUNP, TRP and LPC outperformed the IPM growing 8.3%/8.3%/7.1%YoY respectively. ALPM, IPCA, DRRD and Cipla underperformed the IPM. We expect chronicfocused players to continue to deliver double digit growth. Among MNCs, Sanofi surprised positively with +8% YoY growth, driven by vaccines offsetting Lantus decline, while Abbott continued to outperform IPM.

* Positive volume growth not in sight yet: IPM growth of 10.5% based on MAT Jul’23 was driven by price growth of 4.8%, NI growth of 2.7% and volume growth of 2.9%. Volumes in Jul’23 declined -4.9%YoY with only SUNP and FDC reporting positive volumes. Apart from Opthalmology, Oncology, Urology and Cardiac and Anti-diabetic, all top therapies reported negative volume growth this month. Mankind reported softer growth at 3.2% in Jul’23 (with negative volume growth). We expect WPI linked price increases wef Apr’23 of ~12% to gradually offset earlier NLEM price revision impact. Overall, we expect early double digit growth for IPM in FY24 driven by Price growth of 5- 7%, NI of 2-3% and volume growth of 2-4%.

* Leader (cardiac) leads: IPM’s top therapy- Cardiac delivered 11.1%YoY growth in Jul’23 outpeforming IPM yet again. Acute therapies reported 4%YoY growth in Jul’23 vs. 10%YoY chronic due to deferred seasonality with uptick likely in Aug’23. Therapy growth in Jul’23 was led by Opthalmology, Oncology, Urology and Cardiac whilst AI and Respiratory dragged. In the Anti-diabetic segment, ZYDUSLIF, Alkem, Eris and TRP have reported stellar growth while Sanofi declined -15%. Ipca reported 9%YoY growth in Jul’23 in Pain (+3ppt vs. market) led by growth in Zerodol franchise. While Derma grew 8% in Jul’23, TRP has consistently outperformed the segment by growing in double digits.

* Jul’23 Top brands performance: Cipla’s top 10 brands reported 3%YoY growth. Zydus’ Lipaglyn and TRP’s Shelcal XT grew 34%/22%YoY maintaining their stellar double digit trajectory. IPCA’s Zerodol franchise continues to report healthy growth. Vaccine sales growth is recovering, as expected, for Abbott (Influvac, +43%), GLXO (Infranrix Hexa, +33%), and Sanofi (Hexaxim, +49%; Menactra, +57%). DRRD’s Cidmus and JB Pharma’s Azmarda declined despite robust volume ramp-up. LPC’s top 10 brands grew 2%YoY. Sun’s Top 16-25 grew 7%YoY. Sanofi’s Lantus declined -32%YoY in Jul’23 (Toujeou grew +50%YoY).

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