Remain focused on companies with exposure to Indian markets: IIFL

IIFL has published a report on pharmaceutical companies and it specifically analyses US business margins. In an interview to CNBC_TV18, Abhishek Sharma, Vice President and Pharma Analyst at IIFL spoke about the latest happenings in the sector.

There has been a 1,200 bps kind of a margin erosion for Indian companies which are serving the US generic markets as a whole and out of that, half of the margin erosion has come because of the price pressure and the other half has come because of the increased R&D activities, he said.

We essentially remain focused on companies which have a higher share of EBITDA coming out of India and other markets as compared to US where we still see challenges going forward in terms of pricing pressure continuing, he added.

On that parameter, we would essentially like companies like Torrent Pharma and Alkem Labs, which still continue to derive a lion share of their EBITDA from this market. We also like Biocon because it is a biosimilar story, which has nicely played out in the last one to one and a half years, said Sharma.