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MOSL: HEALTHCARE- Tepid volumes drag overall growth in Dec’19

HEALTHCARE: Tepid volumes drag overall growth in Dec’19

** Indian pharmaceutical market's (IPM) growth stood at 8.8% YoY in Dec'19 (v/s 9.3% YoY in Dec'18), driven by price increase of 5.3% YoY (in-line with 12 months average). Muted volumes at 0.7% YoY (lower than 12 months average of 1.9%) were a drag. Growth of new launches came in at 2.7% YoY.

** For the quarter ended Dec'19 (3QFY20), IPM growth stood at 9.5% YoY, led by price (+5.4%) and new launches (+2.7%). 3QFY20 volume growth was relatively low at 1.4% YoY due to dismal momentum in Oct'19 and Dec'19. Notably, both NLEM/non-NLEM products grew 10.1%/9.5% YoY.

** On MAT basis, industry growth came in at 9.8% YoY, with price growth at 5.3%, new product growth at 2.7% and volume growth at a mere 2% YoY.

Price remains key growth driver; volumes muted
** In value terms, secondary sales of NLEM (~10% of IPM) grew 9.2% YoY and that of non-NLEM (~86% of IPM) by 8.8% YoY in Dec'19.

** Price growth for non-NLEM products was 5.4% YoY in Dec'19. Growth in NLEM products was driven by volumes (+3.8% YoY) and prices (+4.4% YoY).

Dr. Reddy, Emcure, Pfizer emerge as outperformers
** In Dec'19, Dr. Reddy's (+22.8% YoY), Emcure (+17.2%) and Pfizer (+15.6%) delivered the highest growth.

** Dr. Reddy's performance was driven by strong double-digit growth in its top therapies, especially in Derma/ Respiratory (+27.1%/+23.4% YoY). Emcure witnessed good traction in prices (+5.8%) and volumes (+6.5%). Pfizer gained from the strong growth in Anti-infective therapy (+39.4% YoY).

** Sun Pharma's sales dipped to 8% in Dec'19 from 14.5% in Nov'19, mainly due to muted performance of major therapies, except for Anti-infective, which grew 22.8% YoY in Dec'19.