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The domestic branded generics market, a critical cog in the growth wheel for most Indian
companies, is currently in spate. Unlike the apprehension of market participants about the
sustainability of growth, our survey findings indicate that growth is not only sustainable but
will move into the next orbit of 18-20% viz-a-viz current growth of 14-15%. Higher growth
in domestic market will not only improve growth prospects of pharma companies (c30-50%
to revenue), but will also improve overall profitability (margins are relatively higher).
Further, as is the norm, when all companies are in expansion mode, only a handful will
potentially emerge as winners. Hence, to understand these changing dynamics, we
commissioned an extensive and unique study across 27 cities in 11 states (all four zones—
North, South, East, and West), covering more than 100 distributors, representing notably 45-
50% of the total pharma market. These distributors, with more than 10-15 years of presence
in the market, ideally connect suppliers on one hand and consumers on the other.
We covered all tiers of geographies in each zone including metros, tier-I to IV cities. We
travelled across the length and breadth of the country to gain incisive insights into
the future of the domestic pharma market, performance of various Indian
companies, strategies adopted and ground level challenges impacting growth. We
have tied our observations to industry data from AIOCD to overcome individual distributor’s
bias over companies. We further highlight that views of distributors are restricted to their
coverage companies, which differ, but collectively represent 80% of the total market.
Key questions addressed from the survey include:
• What is the potential growth in domestic market and key drivers of this growth?
• How sustainable is the current market growth over next three-four years?
• Which therapeutic areas are growing faster?
• What are the key strategies adopted by various companies?
• What are the key changes in the activity level of MNCs?
We conclude that, Sun Pharma and Lupin are ranked by 94% and 74% of coverage
distributors, respectively, as preferred players in the large–cap space, while IPCA and Torrent
Pharma are ranked by 86% and 70% of coverage distributors, respectively, as leading
players in the mid-cap space. Interestingly, Sanofi-Aventis, among MNCs, is ahead of peers
and is aggressively making its mark in tier III and IV cities. We also identified emerging new
players such as Mankind, Eris, and Macleods, which are gaining strong traction in various
markets.
Combining the takeaways from our distributors survey and the prospects of Indian companies
in emerging markets and US, we expect Lupin, Dr. Reddy’s, Cadila and Torrent Pharma to do
well over the next 12-18 months. We are positive on Sun Pharma, however, current
valuations do not leave much upside for investors.
Overall, through this report, we have attempted to identify trends, drivers, and challenges
faced in the ever-changing market scenario and effectiveness of current strategies adopted
by various companies.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
The domestic branded generics market, a critical cog in the growth wheel for most Indian
companies, is currently in spate. Unlike the apprehension of market participants about the
sustainability of growth, our survey findings indicate that growth is not only sustainable but
will move into the next orbit of 18-20% viz-a-viz current growth of 14-15%. Higher growth
in domestic market will not only improve growth prospects of pharma companies (c30-50%
to revenue), but will also improve overall profitability (margins are relatively higher).
Further, as is the norm, when all companies are in expansion mode, only a handful will
potentially emerge as winners. Hence, to understand these changing dynamics, we
commissioned an extensive and unique study across 27 cities in 11 states (all four zones—
North, South, East, and West), covering more than 100 distributors, representing notably 45-
50% of the total pharma market. These distributors, with more than 10-15 years of presence
in the market, ideally connect suppliers on one hand and consumers on the other.
We covered all tiers of geographies in each zone including metros, tier-I to IV cities. We
travelled across the length and breadth of the country to gain incisive insights into
the future of the domestic pharma market, performance of various Indian
companies, strategies adopted and ground level challenges impacting growth. We
have tied our observations to industry data from AIOCD to overcome individual distributor’s
bias over companies. We further highlight that views of distributors are restricted to their
coverage companies, which differ, but collectively represent 80% of the total market.
Key questions addressed from the survey include:
• What is the potential growth in domestic market and key drivers of this growth?
• How sustainable is the current market growth over next three-four years?
• Which therapeutic areas are growing faster?
• What are the key strategies adopted by various companies?
• What are the key changes in the activity level of MNCs?
We conclude that, Sun Pharma and Lupin are ranked by 94% and 74% of coverage
distributors, respectively, as preferred players in the large–cap space, while IPCA and Torrent
Pharma are ranked by 86% and 70% of coverage distributors, respectively, as leading
players in the mid-cap space. Interestingly, Sanofi-Aventis, among MNCs, is ahead of peers
and is aggressively making its mark in tier III and IV cities. We also identified emerging new
players such as Mankind, Eris, and Macleods, which are gaining strong traction in various
markets.
Combining the takeaways from our distributors survey and the prospects of Indian companies
in emerging markets and US, we expect Lupin, Dr. Reddy’s, Cadila and Torrent Pharma to do
well over the next 12-18 months. We are positive on Sun Pharma, however, current
valuations do not leave much upside for investors.
Overall, through this report, we have attempted to identify trends, drivers, and challenges
faced in the ever-changing market scenario and effectiveness of current strategies adopted
by various companies.
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