Pharma Sector India Stock Overview And Analysis

The Pharma sector in India is expected to show robust growth in the next few years driven by growth in all 3 segments viz.

1. Domestic Formulations which are expected to grow at ~15%
2. Exports which will see huge growth due to the patent cliff in 2012 and emerging markets like Brazil, Mexico, South Africa driving growth
3. CRAMS which is expected to grow at a rate of around 13% globally.

Indian companies have the largest number of US FDA (Food and Drug Administration) approved facilities outside US. They have made regulatory filings for around 70% of the drugs that are going off patent in 2012. Besides many companies have sizable US exposure in their overall revenue. The big pharma companies also seem to have acknowledged capability of Indian companies with many tie-ups, acquisitions and product specific deals happening over the last 2 years.

The companies that will benefit the most are those which have a robust pipeline of products in the regulated markets, a favourable geographic mix (strong presence in India and US with some presence in emerging markets) and potential in biosimilars/niche products. These companies will be best positioned for sustainable growth.

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