May: Pharmaceuticals - Domestic Pharma Monthly Review; : Edelweiss, PDF link

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The domestic pharma market continued to track strong growth trajectory with 18.4% YoY surge in April 2012 (11% growth last year). Among frontline players, all acute focused companies such as Glenmark, Pfizer and Glaxo India significantly outperformed industry because of strong recovery in segments like anti-infective, gastro and dermatology. Chronic continues to outpace industry growth (21.4% growth) with diabetes growing over 31% during the month. Interestingly, top 50 players’ growth is outpacing industry, highlighting market share consolidation among larger players.

Key takeaways from trends during April

·       Domestic pharma market began on a good note with 18.4% growth in April, significantly higher than 11% YoY growth reported in April 2011.

·       Acute segment has been posting strong growth traction over the past three months with anti-infectives, gastro, derma and multi-vitamins catching up industry growth.

·       Chronic segment continued to remain on a firm trajectory (21.4% growth in April) with allthree segments - diabetes, CVS and CNS – posting strong traction.

·       The MNC pack has been outpacing Indian peers and has outperformed relative to the industry (Pfizer 32%, GSK 24%, Novartis 18% and Abbott 19%).

·       Price increase has been the key growth driver for Pfizer and Glenmark.

·       Cipla is improving consistently and catching up market growth. Other notable highlights are growth recovery in Cadila and Ranbaxy.

·       We see a build-up of inventory for Dr. Reddy’s (DRRD) at distributor end. We remain concern as DRRD secondary growth is slogging relative to peers, while increase in inventory could boost primary growth but only in short term.

·       Freebies as percentage of sales have been falling consistently; however, in April we have seen little uptake in case of Cipla and Ipca.

·       Growth in respiratory segment for Lupin has dipped to single digit over the past three months (earlier Lupin was gaining market share in respiratory segment).

·       Outperformers:  Glenmark, Pfizer, GSK and Cadila.

·       Underperformers: Dr Reddy’s, Abbott and Lupin.

Pharmaceuticals - Domestic Pharma Monthly Review; monthly update