The growth of pharma sector is seen growing 6 7 cagr

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The growth of pharma sector is seen growing 6-7% CAGR YOY. Below graph shows how the major companies are performing, it is quite evident that the growth rate is not consistent with the exception of Cadila. FY13 FY14 FY15 FY16 FY17 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% Net Profit Margins Sun pharma Dr Reddys GSK Glenmark Cipla Biocon Cadila 6 | P a g e A Significant drop in current ratios and Debt to Equity Ratios are observed, current ratio below 1 signifies short- term financial obligations, however Debt to Equity ratio is well below 1, so the current state is in good terms, shows the ability of paying back its liabilities. A jump is seen in Cash Flow, may be acquiring additional business. A Healthy EPS is shown Y-O-Y A significant correction is noticed in the Share Price over the period. New Drug Price Control Order issued in 2013 by Director of Food and Drugs had huge impact on stock, this will reduce the price of drugs by 80%. Stock Price reached it peaks on acquisition of Ranbaxy in 2014 and 2015, but unable to sustain and more volatile.
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Looking Ahead Indian pharmaceutical sector is estimated to account for 3.1 – 3.6 per cent* of the global pharmaceutical industry in value terms and 10 per cent in volume terms. It is expected to grow to US$100 billion by 2025. It is one of the fastest growing industry in India and also across the globe, the spend on Pharma or generic Drugs is increasing and is expected to grow at 7-9% CAGR YOY and the sales are expected to grow 17% CAGR YOY. It puts India Pharma sector and companies in good position to grow further. FY2010 FY2017 FY2022 887 1135 1430 356 462 675 20.95 29.61 60 PHARMACEUTICAL SPENDING AND GROWTH (USD Billion) Global Linear (Global) US India The key advantages of India are Cost Efficient : Cost of production is nearly 33% lower than that of in US and other key markets. Diversified Portfolio : Accounts for 10% of global production, more than half of 345 drug master filling in USA in Q4 2016-Q1 2017 are from India. Economic Drivers : The prosperity of Economy to improve drug affordability and also increase in penetration of Health Insurance. Policy Support : Government unveiled ‘Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacturing, 100 per cent FDI is allowed under automatic route. Important Segments in India are Active Pharmaceutical Ingredients (APIs): India became the third largest global generic API merchant market in 2016, with a 7.2 per cent market share. In April 2018, a high-level task force was constituted to create a roadmap for increasing domestic production of APIs. Currently India imports over 60 per cent of its APIs from other countries 7 | P a g e
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Contract Research and Manufacturing services (CRAMS): CRAMS industry is estimated to reach US$ 18 billion in 2018 and expected to witness a strong growth at a CAGR of 18-20 per cent between 2013-18 Formulations: Domestic market size currently valued at US$ 11.2 billion, largest exporter of formulations in terms of volume, with 14 per cent market share and 12th in terms of export value. Double digit growth is expected.
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