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MOSL: HEALTHCARE-Volume growth revives; Sustainability remains key monitorable

HEALTHCARE: Volume growth revives

** Indian pharmaceutical market (IPM) growth stood at 12.1% YoY in Feb'20 (v/s 7.6% YoY in Jan'20). Growth was led by prices (+5.4% YoY) and new launches (+2.9% YoY). Volumes also improved 3.8% YoY in Feb'20.

** For the quarter ended Feb'20, overall growth came in at 9.5% YoY, led by prices (+5.3% YoY) and new launches (+2.7% YoY). Volume growth for the quarter was relatively low at 1.4% YoY due to dismal momentum in Dec'19/Jan'20. Notably, both NLEM/non-NLEM products grew 9.2%/9.5% YoY.

** On MAT basis, industry growth came in at 9.7% YoY, price growth at 5.4% YoY, new product growth at 2.5% YoY and volume growth at a mere 1.9% YoY.

Price - key growth driver; volumes improve as well
** In value terms, secondary sales increased 12% YoY for NLEM (~10% of IPM) and non-NLEM (~86% of IPM) in Feb'20.

** Price growth for non-NLEM products was 5.7% YoY in Feb'20. Growth in NLEM products was driven by volumes (+7.6% YoY) followed by prices (+3.8% YoY).

Natco, Dr. Reddy, Mankind emerge as outperformers
** In Feb'20, Natco (+24.7%), Dr. Reddy's (+21.4% YoY) and Mankind (+19.1%) delivered highest growth.

** Natco witnessed good traction in volumes (+7.6% YoY). Dr. Reddy's performance was driven by strong double-digit growth in its top therapies, especially in Respiratory/ Anti-infective (+29.2%/+24.4 YoY).

** Sun Pharma's sales grew 14.4% in Feb'20 from 10.3% in Jan'20, mainly due to better performance of Anti-infective (+21.2% YoY).

** Secondary sales declined for MSD and Biocon.

** On MAT basis, JB Chemicals/Torrent reported highest price growth of 8.9%/8.2% YoY. Glenmark saw highest growth in new launches (+4.6% YoY).