Unfavourable base drags domestic pharma sales growth to a low 3.5% in November

The domestic pharma market had recorded a stellar 16.6 percent sales growth in the previous month.

Domestic pharma sales slipped to a low-single digit in November, the lowest in 2023, after bouncing back in the previous month, pulled down by an unfavourable base and inventory destocking.

The domestic pharma market reported sales growth of 3.5 percent on year in November on a high base of 15 percent.

Brokerage firm Motilal Oswal Financial Services attributed the tepid growth to weaker seasonal trends and November being a festival season.

"Consequently, all therapy sectors experienced a mid-to-high single-digit growth in November," the brokerage said.

Overall, Indian pharma companies posted a 4 percent on year growth in November, while sales for MNC drug makers rose 3 percent.

Indian pharma players hold nearly 83 percent of the domestic pharma market, while MNCs hold the remaining 17 percent.

Despite the strong performance of most pharma companies in the US market, a subdued show in the domestic market capped overall sales growth for most drug manufacturers.

Brokerage firm Kotak Institutional said even though improved US generics pricing came as a respite, a sustained momentum in domestic sales was critical to the overall growth of pharma companies.

Slowdown across therapies

Poor sales growth was triggered by a slowdown across therapies. Aside from anti-neoplast therapies, which grew 29 percent on year in November, all other big therapies such as cardiac, anti-infective, gastro, anti-diabetic and respiratory underperformed, MOFSL said.

Acute therapies, which constitute 62 percent of total domestic pharma sales, recorded a mere 2 percent growth on year in November, while the chronic therapies segment, which accounts for 38 percent of the Indian pharma market, grew 6 percent from the year-ago period.

The chronic therapies segment delivered double-digit sales growth for every other month in 2023, while acute sales hovered between mid-single digit and low double-digit through the year.

Outperformers vs Underperformers

In terms of listed companies, Ipca Labs, Cipla and JB Chemicals and Pharmaceuticals were growth leaders in November.

Ipca Labs reported sales growth of 10 percent on-year led by double-digit growth in pain,  cardiac, derma and anti-neoplastic therapies, which offset a decline in gastro therapies.

Cipla clocked in 8.8 percent increase in sales, driven by double-digit growth in respiratory therapies, which account for 37 percent of its domestic formulation sales. The company's cardiac and urology portfolios, which account for 11 percent and 5 percent of its domestic sales, also recorded a double-digit growth.

Another outperformer was JB Chemical, which posted 7.4 percent growth on the back of a double-digit sales increase in gastro, gynae and anti-infective therapies.

P&G Health and GlaxSmithKline Pharma (GSK) were the biggest underperformers in November, recording a 9.8 percent and 3.8 percent on year decline in sales growth. Growth was hit by a sharp decline in sales across their key therapies.

Also Read | Domestic pharma sales bounce back in October as favourable base comes into play

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