Pharmaceuticals & Biotech. share price target

IPM is struggling for growth above 10% even after MoM abating COVID concerns and with MRs, physician activities almost reaching pre-COVID level. We believe key reasons for growth below par are (i) subdued new prescription (Rx) leading to volume de-growth (ii) digital marketing yield going south and (iii) sustained lower demand of acute products. Cardiac and anti-diabetic growth takes a breather in Jan-21 at 8.8% and 5.3% after reporting double digit growth in most months during lockdown. While amongst top therapies Gastro and VMN reported double digit growth of 14%...

We expect the companies under our pharmaceutical coverage to clock 36.7% (YoY) earnings growth with an 8.4% (YoY) rise in the revenue base, led by a notable recovery in the domestic market and healthy growth in the export market. In the domestic business, the chronic portfolio continues to be steady, and acute therapies are recovering slowly. US formulations are expected to grow due to a ramp-up in speciality products supported by improving prescription trends, new product launches, and favourable currency movement. We expect a moderation in API sales, which were abnormally high during H1FY21 due to the stocking of raw material by formulation companies. The recent INR weakness will also benefit Indian pharma companies, but some of the margin benefits are being offset from EM currencies and higher API/ KSM costs. Overall, our pharmaceutical coverage would...

The US (select pack) portfolio is expected to grow ~7% YoY to | 12808 crore due to 1) YoY strengthening of US$ vs. rupee (3.6%), 2) new launches (Dr Reddy's) and 3) increased traction/recovery in specialty, injectable portfolios (Albuterol Cipla, Lupin, Insulin Biocon, Injectables - Aurobindo). Domestic formulations (select pack) are expected to grow ~10% to | 9908 crore. Europe is expected to grow ~15% YoY driven by new launches, ramp-up in existing products and currency benefits. API segment is also expected to post strong ~16% YoY growth on the back of a low base effect and shortterm opportunities amid Covid. On the hospitals front, continued QoQ...

to report double-digit growth on back of COVID led products, 2) US QoQ growth to be company specific with selective products driving growth while specialty products sales to be better and also reached pre-COVID levels, 3)...

Cipla: Owing to competition, we expect Cipla to garner 1-7% market share for volume-limited period and 15% thereafter. Hence, with above market share and a 70-90% price erosion assumption, our gRevlimid NPV arrives at | 41. We maintain BUY rating and arrive at a target price of | 965, including...

We hosted Ajanta pharma, Eris Life, Jubilant Life, Indoco Remedies and Suven pharmaceuticals on December 3rd-4th, 2020 on digital platform. Key 2) Companies increased their inventory days for API post COVID due to unstable environment 3)Travel restriction stay in place for USFDA inspectors, which could delay resolution of plants and new approvals while virtual audit still not a reality, 4) New ANDA filing rate to be lower in FY21E due to COVID, 5) Institutional tender orders for anti-malaria products to remain asymmetric in FY21/22E due to diversion of funds from donors, 6) Refrained from addition...

IPM grew by 4% YoY in Aug-Oct after second consecutive growth month. Oct-20 data points indicate that IPM growth could be back at pre-COVID level as 1) IPM witnessed second consecutive month of strong growth, for the first...

The scheme had an outlay of Rs450bn in FY20. With export incentives a major source of other operating income for India generic majors, GOI's decision to cap export benefit of Rs20m under Merchant Export from India Scheme (MEIS) will impact 2-3% of earnings estimates from our pharmaceutical coverage universe. If withdrawal of the incentive scheme remains permanent, it would impact gross margin of high export-oriented companies such as Divis Lab, Dishman Pharma, Biocon, Strides Pharma, Jubilant Life, IPCA, Dr.Reddy's, Lupin, Aurobindo,Cipla and...

IPM growth has been very volatile during lockdown (April-July), despite no restriction imposed on the industry. Anti-Infective continued to be most impacted, while Cardiac was an outlier showing healthy growth in every lockdown month. 1QFY21 sales of domestic formulation were negative for most companies, and real growth was only reported by ERIS and IPCA. Early trends and management comments indicate 2QFY21 domestic formulation sales could be negative as MRs continue to be off-field and vector borne disease cases have also been on lower side. The biggest beneficiaries for...