Indian Pharma Market records strong growth for second straight month in May

Indian pharma companies outperformed MNCs by 300 basis year-on-year in May

The Indian Pharma Market (IPM) seems to be waking up from a slumber as it recorded a second straight month of double-digit growth in May. The IPM grew around 10 percent on year in May, aided by a low base, volume growth and strong demand across key therapies.

The strong growth in May comes after the IPM increased 11 percent year-on-year in April. The trend for the Indian Pharma Market this year stand at a stark contrast with a decline of 9 percent and 6 percent, seen in April and May, respectively, last year.

Volumes also grew 3.5 percent in May and while JM Financial does highlight that monthly volumes are yet to sustain the positive momentum, it still believes FY24 could deliver 2-4 percent volume growth for the IPM.

Baking that in along with expectations of price growth of 5-7 percent, JM Financial sees IPM growth to be in early two-digit in FY24. The IPM growth in FY23 was at 8 percent.

All therapies perform well

Brokerage firm Motilal Oswal Financial Services noted that acute therapies contributed 62.4 percent to the overall IPM in May while chronic therapies made up 37.6 percent. While the contribution from the chronic segment was lower, its growth outpaced that of acute therapies.

The chronic segment grew 12.5 percent on year while the acute segment expanded 10.6 percent. JM Financial also believes that the focus now shifts to chronic therapies to deliver healthy double-digit growth. Therapy growth in May was led by urology, oncology and cardiac and dragged by gastrointestinal, the firm highlighted.

Brand Performance

Indian drugmakers capture the majority share of 83 percent of the IPM, while the rest is held by multinational pharma companies. Listed pharmaceutical companies contributed 57.2 percent to the total Indian Pharma Market.

According to MOFSL, domestic drugmakers have consistently outperformed their multinational peers for the past 12 months and the trend continued in May as well.

"Indian pharma companies outperformed MNCs by 300 basis points year-on-year in May," MOFSL stated in its report. Top performers in the listed universe were Ajanta Pharma with 16 percent growth, Mankind Pharma with 14 percent, Ipca Labs with 12 percent, Sun Pharma and Torrent Pharma with 11 percent each. The following companies also outperformed the IPM growth, while others were largely-in line, JM Financial wrote in a report.

Among MNC's Abbott India registered the highest growth of 10 percent, in sync with the industry.

Meanwhile, as the US market struggles to find stable ground amid persisting headwinds, the strong growth in the Indian Pharma Market has prompted analysts to go bullish on companies with higher reliance on the domestic market. A testament to that positive outlook is clearly reflected in Nifty Pharma's 5.6 percent rise in the past one month, a sharp outperformance as against Nifty50's 2.2 percent gains in the same period.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​​​​​​​​​​​​​​​​​​​​​