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Modest growth acceleration on a low base

* According to total sales data from IMS, IPM grew by 15.4% yoy in July’21, led by continued demand normalization and the low-base effect of last year. On a MAT basis, IPM grew 15.8%, driven by new product growth of 5.2%, volume growth of 6.6% and pricing growth of 4%.

* All major therapies continued their positive growth trajectory with Anti-infectives posting the highest growth at 30% yoy in July due to low base. Other Acute therapies such as Gastro, Pain and Respiratory registered 17-27% growth. Growth in Chronic therapies was relatively subdued.

* Within our coverage, Dr. Reddy’s grew the fastest at 26% yoy, followed by Ipca at 17%. Cadila, Sun and Lupin grew between 13% and 15%. Cipla grew the slowest at 5%. Other notable outperformers were Alkem (26%), GSK (17%) and Macleods (20%).

* We expect domestic revenue growth for our coverage companies to be robust in FY22. However, IPM’s growth momentum is expected to slow down in the coming months as the Covid tailwinds fade.

SUNP (+14.4% yoy): Top-3 therapies – Neuro (+4%), Cardiac (+7.5%) and Gastro (+21.7%). Growth across major therapies was positive, except for Anti-diabetic (-2.9%). Total volumes grew 3.1% yoy. Top-10 brands grew 4.1% yoy, Top 11-25 brands grew 14.5%, and the rest of the brands grew 17.6%.

CIPLA (+5.2% yoy): Top-3 therapies – Respiratory (+17.2%), Anti-infectives (+20.1%) and Cardiac (+1.9%). Antineoplast (-81.8%) was the only major therapy to post a decline. Total volumes grew 3.6% yoy. Top-10 brands declined 18.4% yoy, Top 11-25 brands recorded 21.9% growth, and the rest of the brands grew 15.1%.

LPC (+15.1% yoy): Top-3 therapies – Cardiac (+9.7%), Anti-Diabetic (+6.5%) and Respiratory (+26.3%). All major therapies posted growth. Volume growth was at 5.5% yoy. Top-10 brands grew 8% yoy, Top 11-25 brands posted 5.7% growth, and the rest of the brands grew 20.3%.

CDH (+13% yoy): Top-3 therapies – Anti-infectives (+30.2%), Respiratory (+23.6%) and Cardiac (+0.3%). VMN (-11.3%) was the only major therapy to post a decline. Volumes declined 1.7%. Top10 brands grew 8.6% yoy, Top 11-25 brands grew 16%, and the rest of the brands grew 13.9%.

DRRD (+25.6% yoy): Top-3 therapies – Gastro (+24.9%), Respiratory (+34.5%) and Cardiac (+5.8%). All major therapies posted double-digit growth. Volume growth was strong at 16.1%. Top10 brands posted 32.2% yoy growth, Top 11-25 brands grew 40.7%, while the rest of the brands grew 15.9%.

IPCA (+16.8% yoy): Top-3 therapies – Pain/Analgesic (+12.6%), Anti-infectives (+33.2%), and Antimalarials (+24.9%). Cardiac (-3.6%) and Antineoplast (-3.8%) saw declines. Total volumes fell 6.7%. Top-10 brands fell 5% yoy, Top 11-25 brands grew 14.5%, and the rest of the brands grew 30.6%.

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