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Large diabetes population enhances growth
We expect the Oral Anti Diabetic (OAD) therapeutic group to grow over
21% due to high incidence of diabetes in India. The market share of
OAD products is likely to improve to 8% from current level of 6% over
the next two years. With over 30 pharma companies present in this
segment marketing over 250 brands in 470 SKUs, we expect OAD prices to
remain stable due to stiff competition. We expect good volume growth
for the brands which faced price reduction in Sept’13 and July’14 due
to NPPA. We recommend Sun Pharma and Lupin based on their strong
brands in the OAD segment. Key risks to our assumptions include
additional OAD brands coming under price control and slower growth in
domestic pharma market.
$ OAD fastest growing segment: As per IMS MAT- June’14 data, OAD is
the second largest therapeutic group in India with market size of
Rs41.77bn and grew at 21.2% against the industry growth of 9.8%. We
expect its MS to go up to 8% from current level of 6% over the next
two years due to the increasing incidence of diabetes in India. We
expect both listed and unlisted companies with a presence in this
segment to benefit from the strong segment growth.
$ Important therapeutic segment: OAD is an important therapeutic
segment as 21 of top 300 brands fall under this segment. These brands
generated revenues of Rs18.12bn and grew at ~34% against the industry
growth of 9.8%. USV has five OAD brands and Sun Pharma four and they
have strong presence in this segment. Sanofi India and Novartis India
have two brands each in this segment. We expect these companies to
benefit from the strong growth of the segment.
$ OAD contributes over 10% to revenues: OAD brands account for 10-12%
of the domestic revenues for Lupin, Sanofi India and Sun Pharma and
hence is an important revenue earner for these companies. For Novartis
India, OAD brands contribute ~40% of its pharma revenues and hence the
company has high exposure to this segment. All 108 brands of OAD and
CVS drugs that came under price control in July’14 will be eligible
for up to 10% increase in price per annum in July’15. We expect good
volume growth for these brands which will partly off-set the effect of
price reduction. Major beneficiaries will be Sun Pharma, Novartis
India and Sanofi India.
$ Sun Pharma and Lupin preferred picks: Sun Pharma and Lupin remain
our preferred picks in the OAD segment. With increasing incidence of
diabetes in India, we expect these companies to derive good growth. As
OAD brands contribute over 10% of domestic revenues for these
companies, we expect them to perform well in future. Key risks to our
assumptions include additional OAD brands coming under price control
and slower growth in the domestic pharma market.
Thanks & Regards
--
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
��
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Large diabetes population enhances growth
We expect the Oral Anti Diabetic (OAD) therapeutic group to grow over
21% due to high incidence of diabetes in India. The market share of
OAD products is likely to improve to 8% from current level of 6% over
the next two years. With over 30 pharma companies present in this
segment marketing over 250 brands in 470 SKUs, we expect OAD prices to
remain stable due to stiff competition. We expect good volume growth
for the brands which faced price reduction in Sept’13 and July’14 due
to NPPA. We recommend Sun Pharma and Lupin based on their strong
brands in the OAD segment. Key risks to our assumptions include
additional OAD brands coming under price control and slower growth in
domestic pharma market.
$ OAD fastest growing segment: As per IMS MAT- June’14 data, OAD is
the second largest therapeutic group in India with market size of
Rs41.77bn and grew at 21.2% against the industry growth of 9.8%. We
expect its MS to go up to 8% from current level of 6% over the next
two years due to the increasing incidence of diabetes in India. We
expect both listed and unlisted companies with a presence in this
segment to benefit from the strong segment growth.
$ Important therapeutic segment: OAD is an important therapeutic
segment as 21 of top 300 brands fall under this segment. These brands
generated revenues of Rs18.12bn and grew at ~34% against the industry
growth of 9.8%. USV has five OAD brands and Sun Pharma four and they
have strong presence in this segment. Sanofi India and Novartis India
have two brands each in this segment. We expect these companies to
benefit from the strong growth of the segment.
$ OAD contributes over 10% to revenues: OAD brands account for 10-12%
of the domestic revenues for Lupin, Sanofi India and Sun Pharma and
hence is an important revenue earner for these companies. For Novartis
India, OAD brands contribute ~40% of its pharma revenues and hence the
company has high exposure to this segment. All 108 brands of OAD and
CVS drugs that came under price control in July’14 will be eligible
for up to 10% increase in price per annum in July’15. We expect good
volume growth for these brands which will partly off-set the effect of
price reduction. Major beneficiaries will be Sun Pharma, Novartis
India and Sanofi India.
$ Sun Pharma and Lupin preferred picks: Sun Pharma and Lupin remain
our preferred picks in the OAD segment. With increasing incidence of
diabetes in India, we expect these companies to derive good growth. As
OAD brands contribute over 10% of domestic revenues for these
companies, we expect them to perform well in future. Key risks to our
assumptions include additional OAD brands coming under price control
and slower growth in the domestic pharma market.
Thanks & Regards
--
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
��
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