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“Pharma sector growth subdued with net sales at 7.8% in December 2012 quarter”

Lower investments in the sales force, a weak anti infective season and uncertainty surrounding the pending pricing policy are key hindrances to growth, according to Nomura Equity Research in its report on the domestic pharma sector

 
The India pharmaceuticals market (IPM) is a secular growth story, with market growth led by new product introductions and volume growth driven by increasing penetration and better access to healthcare. As per data from All Indian Origin Chemists & Distributors (AIOCD), a pharmaceutical market research company, net sales growth in the IPM remained subdued at 7.8% y-o-y in the December quarter of 2012. The slowdown in IPM has been mostly acknowledged by all leading companies. Lower investments in the sales force, a weak anti infective season and uncertainty surrounding the pending pricing policy are key hindrances to growth, according to Nomura Equity Research in its report on the domestic pharma sector.
 
 
Sun Pharmaceutical Industries’ net sales in India grew by 18.2% y-o-y in 4QFY13. The company has been able to sustain growth above the IPM despite a large base.
 
Cipla’s net sales grew at 6.1% y-o-y in 4QFY13. For the past 10 quarters, the company has sustained growth below IPM levels, which is because of the base impact, as per observations made by Nomura.
 
GlaxoSmithKline Pharma’s net sales remained flat y-o-y. Its 4QFY13 sales reveal a large drop on a sequential basis.
 
Ranbaxy Laboratories’ net sales grew at 7.4% y-o-y in 4QFY13. For the past few quarters, the company has sustained growth below IPM.
 
Lupin’s net sales grew at 13.9% y-o-y in 4QFY13. For the past three quarters, the company has sustained growth above IPM. The growth rate has been declining in absolute terms over the past 10 quarters.
 
Dr Reddy’s Laboratories’ net sales grew at 5.3% y-o-y in 4QFY13, sustaining below IPM.
 
Glenmark Pharmaceuticals’ net sales grew at 12.7% y-o-y in 4QFY13, sustaining above IPM for the past seven quarters.
 
As seen from the performances of the leading Indian pharmaceutical companies in the December 2012 quarter, the situation is likely to remain subdued going forward.
 

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