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MOSL: HEALTHCARE: Double-digit growth off a low base; price growth surprises

HEALTHCARE: Double-digit growth off a low base; price growth surprises

 

• Indian pharmaceutical market (IPM) secondary sales grew by a robust 12.7% YoY in July 2018 - such strong double-digit growth level was last recorded in September 2016. We note that growth has come off a low base (GST-led disruption was witnessed in July 2017). The low base impact will continue supporting growth over the next 2-3 months, in our view.
• Better volumes (+6.6% YoY), new launches (+2.6%) and higher prices (up 1.2% after 12 months of price decline) also supported growth for the month.
• YoY growth was 7.8% for the 12M ended July 2018 v/s 9.1% YoY for the 12M ended June 2018.

 Natco, Glenmark and Lupin witness highest YoY growth for the month

• All companies witnessed growth in July 2018 off a low base. Natco reported the highest growth of 29.6% in the month, followed by Glenmark (+26.6%, led by >35% growth in its top two products), Lupin (+19.6%, led by >20% growth in its top two therapies) and Alembic (+18.4%).
• Cipla (+4.4%), Merck (+4.8), GSK Pharma (+5.7%), Sanofi India and Pfizer (+6.2% each) exhibited growth but largely underperformed the IPM. Cipla underperformed primarily due to seasonal weakness, which impacted its second largest portfolio Anti-infectives (down ~7% YoY). GSK Pharma’s top three products reported a decline in July 2018.
• USV witnessed highest volume growth (+10.6% YoY), while Natco registered highest new launches (+9.5% YoY).