The Indian pharmaceutical industry has experienced significant growth, evolving from a sales turnover of Rs. 10 crores in 1947 to approximately $5.5 billion in 2004, with an expected CAGR of 23.9% to reach $85 billion by 2020. Key players include Sun Pharma, Cipla, and Dr. Reddy's Labs, which dominate the market and focus on generic drugs, driven by lower production costs and increasing global demand. The industry also integrates traditional medicine practices and faces challenges such as intense competition and price erosion.

1. INDIAN PHARMA
INDUSTRTY

3. Areas of
Coverage
Santhanam
-Introduction
-Players
-competitors
Dipti
-products
-substitute
Saurabh
-nature
-Industry outlook
-Brokerage reports
Basheer
-Factors bearing
demands
-End users

4. Basically deals with medicinal drugs which are use in the diagnosis, cure,
mitigation, treatment, or prevention of disease
Over the past 40 years or so the Indian pharmaceutical sector witnessed rapid
growth and transformation.
The annual growth rate was about 17% since 2004 and more than 12% since
1947 with a volume of just Rs. 10 core in 1947 to a sales turnover of about US
$ 5.5 billion in 2004.
 One of the fastest developing utility sector.
Expected to grow at higher phase.
Lower cost of production.
Likely to surpass other countries and reach third position in growth.
OVERVIEW

5. Evolution of pharma

7. › ANTI-BIOTICS
› PAEDIATRIC
› GYNAEC
› ORTHO
› ANTI COUGH & COLD
› ANTI ACID & GASTRIC
› ANALGESICS & NSAID
› MULTI VITAMIN & ANTI OXIDANT
› HEPATO PROTECTIVE (LIVER RELATED)
› DERMA
› GENITO URINARY
› INJECTABLE
Products

8. Products
Products
HIV
INFECTION
-ATRIPLA
-COMPLERA
-INSENTRESS
OSTEOARTHRITI
S
-GLUCOSAMINE
-CHONDROITIN
-PRIMORINE
SMOKING
CESSATIONS
-NICTRO INS
-HABITROL
-ZYBAN
EXPECTORANTS
-DURATUSS
-MUCINEX
CANCER
-HELEVAN
-IBRANCE

10. Pharmaceutical industry has substitutes of Ayurveda and natural therapy or
remedies .
1. HIV infection:- garlic.
2.. Osteoarthritis:- cinnamon powder and honey, mustard oil and camphor
3. Smoking cessations :- herbal cigarettes, turmeric tulsi, cinnamon ,gangal,
mulethi paste.
4. Expectorants:- honey and ginger, and lime.
5. Cancer :- aloevera and apple cider vinegar ,termeric,green tea,asahwgandha.
SUBSTITUTES

11. • is a system of traditional medicine originating in Tamil Nadu in South India.
•Siddha is more about the 8 element and the supernatural powers in humans.
•the basic concepts of the Siddha medicine are similar to Ayurveda. The only difference
appears to be that the siddha medicine recognizes predominance of
Examples :-
1.Na (tongue): black in Vaatham, yellow or red in pitham, white in kabam, ulcerated in anemia.
2.Varnam (color): dark in Vaatham, yellow or red in pitham, pale in kabam.
3.Kural (voice): normal in Vaatham, high-pitched in pitham, low-pitched in kabam, slurred
in alcoholism.
(ii)siddha
BASIS AYURVEDA SIDDHA
vaatham Old age childhood
kabam childhood Old age
pitham adults adults

12. Factors bearing demand

13. USERS OF INDIAN PHARMA
› INTAS-One of the largest Animal
Healthcare Company.
› Animal Pharmaceuticals products are
available in over 8,500 veterinary clinics
nationwide.

14. People

15. › Indian pharma has more
than 545 subsidiary
companies outside India.
› US, Europe, Japan, Africa,
Australia are top countries
who use Indian Pharma
products.
› Many such products used
are generic medicines
› Preferred because of low
cost of medicines.
Companies

16. Company Name
Market Cap
(Rs. cr)
Sun Pharma 177,118.59
Lupin 82,753.62
Dr. Reddys Labs 53,059.00
Cipla 50,944.95
Aurobindo Pharm 48,159.56
Cadila Health 41,420.63
Divis Labs 29,955.47
GlaxoSmithKline 27,596.24
Glenmark 26,864.09
Torrent Pharma 25,647.40
Wockhardt 17,694.43
Piramal Enter 16,911.18
Alembic Pharma 12,589.09
Ajanta Pharma 11,697.13
Pfizer 11,550.84
Company Name
Net Sales
(Rs. cr)
Cipla 10,131.78
Dr. Reddys Labs 10,011.00
Lupin 9,752.47
Aurobindo Pharm 8,095.10
Sun Pharma 8,017.19
Cadila Health 5,284.40
Glenmark 5,085.60
Torrent Pharma 3,475.49
GlaxoSmithKline 3,287.58
Jubilant Life 3,176.30
Ipca Labs 3,085.14
Divis Labs 3,084.01
Piramal Enter 2,401.41
Abbott India 2,288.65
Biocon 2,241.60
PLAYERS

17. Key Players –Recent Stock Updates

18. Resources
Raw materials Human
Resource
Suppliers

19. › Chemicals used for manufacturing drugs, medicines are supplied by API Companies.
› Those API companies are pharma companies themselves.
› TAPI (Teva Active Pharmaceutical Ingredients) is the leading manufacturer of APIs in the
world today with over 75 years of experience and around $750 million in third party sales. The
company currently holds the industries largest portfolio of over 300 APIs.
› Dr. Reddy’s Laboratories
› Aurobindo
› Cipla
› Sandoz
› Ranbaxy
› Sun pharma
Raw materials

20. Companies Offering
Zenatek Software Solutions for Tracking and Monitoring Pharma Cargo
Ypsomed Pen Injectors, Pen Needles and Auto-Injectors for Self-Injection
WILCO Leak Detection and Inspection Machines
Vertellus Biomaterials Biocompatible Polymer Coatings for Drug Delivery
UPS Healthcare Healthcare and Pharmaceutical Logistics Services
Testo Thermometers, Humidity Meters, pH Meters and Data Loggers
SHL Autoinjectors, Pen Injectors and Inhaler Systems
Qualicaps Capsules and Pharmaceutical Processing Equipment

21. NATURE OF PHARMA INDUSTRY

22. › Cyclical stock: Highly correlated to the economic activity.
› When the economy is in a recession the profits of a Cyclical company tend to drop
and so its share price. When the economy is in a good shape (expansion), the share
price tends to goes up with the profit growth.
› Examples - Automobile Industry, Hospitality Industry etc.
CYCLICAL INDUSTRY

23. › Non cyclical stock : Is very Low Correlated to the economic activities.
› The price of the share and the profits of the company does not depends on how the
economy is behaving, whether the economy is experiencing the super normal,
having a constant growth or there is a slowdown in the economy.
› Examples- Power, Household products, Education, Paper Industry etc.
NON CYCLICAL/ DEFENSIVE INDUSTRY

25. SUMMARIZATION OF BROKERAGE REPORTS

26. › Sun Pharma continues to maintain its top rank by sales and achieved 17.5% growth in
October 2015.
– Ranbaxy’s growth of 17.8% in October was the highest since its acquisition by Sun
Pharma.
– As per PL’s view, manpower and product rationalisations could be the reasons of
underperformance in Ranbaxy since acquisition.
PRABHUDAS LILLADHAR’S REPORT

27. › Cipla’s growth in anti‐infective 22.1% and respiratory 21.8% and combined contributed
more than 40% of domestic sales.
– Cipla’s growth was 21% in October 2015.
› Dr Reddy’s sales grew at 21% v/s its average of 17% in Apr‐Sept 2015.
– The company expects to maintain growth above industry average (18.85%) in FY16E.
› Lupin’s growth was 22.2% post its stupendous growth of 23% and 32% in Feb and Mar
2015, respectively.
– after having lower sales of around 3% in April‐Jun 2015

28. SUN PHARMA ACCUMULATE
CIPLA ACCUMULATE
DR. REDDY’S LAB BUY
LUPIN SELL
RATINGS BY PL BROKER

29. › Sun Pharma’s : Revenues fell to 6837.6cr i.e. 14.8% YoY (I-direct estimate: 7064.1 cr)
mainly due to a decline in US sales.
– Domestic sales increased mere 1.3% YoY to 1818.7 crore (I-direct estimate: 1996.7cr)
due to inventory adjustment.
– EBITDA margins declined 837 bps YoY to 28.3% (I-direct estimate: 27.2%)
› Cipla’s: Revenues grew 24.8% YoY to Rs 3452.4 crore, on account of 50.8% growth in
export formulation to Rs 1874 crore. EBIDTA rose to 22.9% and Net Profit by 44.4% YOY
to 431.2 cr.
ICICI DIRECT’S REPORT

30. › Dr. Reddy’s Lab : Revenues showed growth of 11% YoY to INR 39890mn.
– EBITDA margin stood at 28.6% expanded by 590bps on account of increase in gross
margins due to better business mix & lower SGA expenses.
– R&D expenses stood at 11.4% in line with management guidance due to scale up in
development activities of complex generics.

31. SUN PHARMA HOLD
CIPLA HOLD
Dr. REDDY’S LAB HOLD

32. › The IPM size is expected to grow to US$ 85 bn by 2020 at CAGR of 23.9%.
› By 2020, India is likely to be among the TOP THREE pharmaceutical markets by
incremental growth and SIXTH largest market globally in Absolute size .
› The life style segments such as cardiovascular, anti-diabetes, anti-depressants and anti-
cancers will continue to be lucrative and fast growing due to increased urbanisation and
change in lifestyle patterns.
› The government is focusing on speedy introduction of generic drugs into the market. This
also will benefit Indian pharma companies.
› Intense competition and consequent price erosion would prevail in future also.
FORECASTING

33. › The GOI has unveiled ‘Pharma Vision 2020’ aimed at India making a Global Leader in
end to end drug manufacturer.
› India will see the largest M&A in Pharma and Health Care sector.
› Cipla, Sun Pharma, Dr. Reddy & Lupin might become the part of Government’s ‘JAN
AUSHADHI’ project.
– There are 117 stores across the country and planning to expand 600 in next two years.

34. › The share of generic drugs is expected to continue increasing it could represent about 90
per cent of the prescription drug market by 2016
› Due to their competence in generic drugs, growth in this market offers a great opportunity
for Indian firms.
› Generic drug market is expected to grow in the next few years, with many drugs going off-
patent in the US and other countries.
› India’s OTC drugs market stood at USD 3 billion in 2011 and is expected to expand at a
CAGR of 16.3 per cent to USD6.6 billion over 2016.
– There is a huge market for OTC drugs as the penetration of chemists in the rural
market increases.

35. › http://www.themedica.com/
› http://www.pharmaceutical-technology.com/
› http://www.mdtvalliance.org/
› http://www.pharmarawmaterialmanufacturers.com/
› http://www.moneycontrol.com/
› http://www.investopedia.com/
› http://www.ibef.org/
› http://www.slideshare.net/
Reference