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The Dec’22 IPM grew 10.5%, primarily driven by price increases (6.8 percentage points), followed by new products (2.2 ppts) and volumes (1.4 ppts). On a MAT basis, the IPM grew 7.7%, primarily driven by price increases (6 ppts), followed by new products (1.7 ppts). Therapies such as respiratories (up 19%), anti infectives (15%) and VMN (12%) grew despite high bases. Cardiac, GI, derma and neuro/CNS therapies grew 7-8%. Acute therapies grew 13%; chronic and sub-chronic therapies, 8% and 10% respectively. Of MNCs, barring Abbott, AstraZeneca and GSK, all others undershot the IPM. Alembic and Alkem grew 16% each, while Cipla and Eris grew 14%-16%. Ipca and Lupin underperformed the IPM

Mixed performance of domestic companies. On a low base, Natco recorded the highest growth (69%). Alembic and Alkem each grew 16%, while Cipla and Eris grew 14%-16%. JB Chemicals and Torrent’s performances paralleled that of the IPM. Other companies such as Indoco, Dr Reddy’s and Zydus grew 8- 9.5%. Companies that undershot the IPM growth are Ipca (declining 3.4%), Lupin (2%), Ajanta (5%) and Sun (6%).

Spark missing for MNC pharmas. Barring Abbott (up 13%), AstraZeneca (12%) and GSK (9.5%), all others underperformed the IPM. Companies such as Sanofi and Pfizer grew a mere 1-2%.

Stellar growth for respiratory and anti-infective therapies. Respiratory therapies grew 19%, followed by anti infectives (15%) and VMN (12%). Cardiac, GI, derma and neuro/CNS therapies grew 7-8%, while anti-diabetes grew a mere 4%, as volumes of older molecules declined significantly, partially offset by increased demand for new products. Other therapies such as gynaecology, anti-neoplastics, ophthalmology, hormones and urology grew a healthy 11-17%.

Our view. A ramp-up has been seen across therapies such as respiratories, anti infectives and VMN (similar trends last seen during peak Covid times). In Dec, demand in acute therapies rose. Other therapies such as gynaecology, antineoplastics, ophthalmology, hormones and urology also picked up traction. Despite the high bases, we believe price hikes should aid decent growth for acute therapies, while the volume growth momentum in chronic therapies would continue to do well. We maintain our positive view on chronic therapyfocused companies such as Abbott, Ajanta Cipla, JB Chemicals, Eris and Torrent Pharma.

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