Pharma – ‘Big Opportunity’

Pharma – ‘Big Opportunity’



Pharma industry presents a wonderful opportunity to the Indian players in generics and CRAMS space. With 119 USFDA approved manufacturing facilities in India, domestic drug makers are well poised to tap US$96bn opportunity presented as blockbuster molecules are going off patent in US during the next 2-3 years. In addition to this, US$55bn outsourcing opportunity is knocking Indian pharma companies. Research on New Chemical Entities (NCEs) and Novel Drug Delivery Systems (NDDS) is now becoming an integral part of the strategy of many Indian pharma companies to achieve sustainable long term advantage. We expect to see Indian vendors expanding their geographical presence and service – offering portfolio through acquisitions. Partnering strategies like licensing arrangements, collaborative research will be increasingly undertaken. We have outlined the following companies which are well equipped to tap this opportunity.



Dr. Reddy’s – BUY

CMP Rs1,405, Target Rs1,750, Upside 24.6%



± US markets to drive growth

± Russian business adding momentum

± Strongly placed in Indian formulations business

± Strong Balance Sheet, strong earnings growth



Biocon – Market Performer

CMP Rs347, Target Rs375, Upside 8.0%



± Domestic formulations business to witness strong growth

± Shift in business mix; Insulin to drive growth

± Acquisition of Axicorp, Germany –benefits flowing in

± Strong earnings growth and expected key triggers



IPCA Labs – BUY

CMP Rs286, Target Rs340, Upside 19.0%



± Strongly placed in formulations business

± Indore SEZ to add momentum

± Exports to drive growth

± Recovery in anti-malarial segment

± Earnings to grow at a CAGR of 31%; compelling valuations



Please find attached our detailed report on the same.





Warm Regards,