Pharmaceutical companies across the globe are facing the same problem 1) fierce competition, 2) shorter time-to-market, 3) expiring patents, 4) slowing sales growth, 5) declining profitability in developed markets, and 6) stringency from authorities for giving approvals. Especially in the regulated markets, with the rising demand for healthcare and falling budgets, government and payers are exerting pressure to drive down prices. Additional woes for the non-regulated market include economic environment, regulatory issues and currency movement which are negatively impacting the near-term outlook. Hence, given the ambiguity linked with the exports, we feel having exposure in the domestic market will result in stable revenues. Even though issues do exist in the domestic market like 1)additions in the NLEM list, 2)FDC ban, 3)generic-generic penetration and 4)GST implication with BAR CODING in all the chemist shops. We initiate coverage with MNC companies which we believe are pure domestic players in the pharma basket. These companies will continue to enjoy premium given 1)stability in the business, 2)high ROCEs, 3)strong BS, and 4)high dividend. We like Abbott India(BUY, 17% upside potential, target PER of 26x+Rs954/sh),...