India Pharma Sector - Domestic pharma growth hits single digits ::Credit Suisse,

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● July was another successive weak month for Indian pharma. IPM
growth has now slipped below 10% (Fig 1) and the growth decline
was witnessed across Chronic and Acute therapies (fig 2). 1Q12
commentary of pharma companies did suggest slowdown in the
Acute segments while slowdown in Chronics now is a surprise.
● In the Acute segment, growth has materially declined in Antiinfectives,
GI and Pain segments. These segments are now just
growing at mid-single digits versus last three-year CAGR of 14%
(Fig 2). In the Chronics, Anti-diabetes continue to show healthy
growth followed by Cardiac.
● In this environment, we expect those companies to do well which
have 1) higher exposure to chronics and 2) relatively lower
exposure to India. In our coverage, we recommend Lupin and Sun
(Fig 3). Sun still continues to grow at 18%.
● The slowdown could be related to seasonal factors but we believe
increasing competition also has a role to play. Its interesting to
note that despite low exposure to Chronics, Mankind (Rank 8th)
still grew at 19% while Macleods (Rank 14th) grew at 26%.


Another successive weak month for India Pharma
July 2011 was another successive weak month for Indian pharma.
IPM growth has now slipped below 10% (Fig 1) and the growth
decline was witnessed across Chronic and Acute therapies (Fig 2).
1Q12 commentary of pharma companies did suggest slowdown in the
Acute segments while slowdown in Chronics now is a surprise.