Pharma Sector Introduction:
India is the world’s top supplier of generic pharmaceuticals. The Indian pharmaceutical industry supplies more than half of global demand for various vaccines, 40% of generic demand in the United States, and 25% of all pharmaceuticals in the United Kingdom.
India ranks third in terms of pharmaceutical manufacturing by volume and fourteenth in terms of value. Domestic pharmaceutical manufacturing is comprised of a network of 3,000 pharmaceutical businesses and 10,500 manufacturing facilities.
India is a significant player in the global pharmaceutical industry. Additionally, the country boasts a sizable pool of scientists and engineers who have the capacity to propel the business forward. At the moment, Indian pharmaceutical companies supply more than 80% of antiretroviral medications used internationally to address AIDS (Acquired Immune Deficiency Syndrome).
Domestic demand for Pharma:
Domestic demand is predicted to triple in the next decade, according to the Indian Economic Survey 2021. India’s domestic pharmaceutical market is expected to reach $42 billion in 2021, $65 billion by 2024, and $120–130 billion by 2030.
India’s biotechnology business is composed of the following segments: biopharmaceuticals, bio services, bio-agriculture, bioindustry, and bioinformatics. In 2019, the Indian biotechnology sector was worth $64 billion and is predicted to grow to $150 billion by 2025.
In FY20, India’s medical equipment market was worth $10.36 billion. From 2020 to 2025, the market is estimated to grow at a CAGR of 37% to reach $50 billion.
Indian Pharma Exports:
India’s exports of medications and pharmaceuticals were valued at $24.44 billion in FY21. India is the world’s 12th largest exporter of medical goods. The pharmaceutical industry accounts for 6.6% of total merchandise exports in the country.
As of May 2021, India had given 586.4 lakh vaccines to 71 countries, including 81.3 lakh through grants, 339.7 lakh through commercial exports, and 165.5 lakh through the platform. Indian pharmaceuticals are exported to more than 200 nations worldwide, with the United States serving as the primary market.
Generic medications make for 20% of global exports by volume, making the country the world’s largest supplier of generic medicines. Between April and May 2021, India’s medication and pharmaceutical exports were worth $3.76 billion.
Top 15 Pharmaceutical companies to Invest:
|S.No.||Name||CMP Rs.||ROCE 5Yr %||ROE 5Yr %||P/E||EV / EBITDA||PB X PE||PEG||Debt / Eq||Int Coverage||ROCE %||ROE %||ROIC %||ROA 12M %||EPS 12M Rs.||Mar Cap Rs.Cr.|
|1||Divis Laboratories Ltd||5372.15||27.42||20.46||69.59||45.41||1067.51||5.81||0||3065.72||32.09||23.93||22.68||20.59||77.2||142613.7|
|2||Abbott India Ltd||21551.55||36.32||25.55||64.86||42.45||1141.54||2.95||0.06||51.16||35.23||27.45||25.4||18.7||332.29||45797.04|
|3||Laurus Labs Ltd||651||20.05||21.56||33.17||21.52||446.8||0.68||0.57||18.53||39.6||45.16||27.15||20.72||19.63||34932.82|
|4||Glaxosmithkline Pharmaceuticals Ltd||1481.7||30.61||17.39||58.84||29.29||984.98||12.6||0||229.04||43.78||28.34||37.65||15.06||21.75||25100.89|
|5||Alembic Pharmaceuticals Ltd||806.6||24.63||25.35||15.23||11.63||47.06||1.47||0.1||104.94||26.01||28.23||35.09||17.98||52.97||15854.78|
|6||Suven Pharmaceuticals Ltd||539.45||-||-||36.53||26.39||424.84||0||0.12||53.64||40.43||35.52||51.77||27.18||14.77||13732.51|
|7||ERIS Lifesciences Ltd||818.4||30.71||30.59||29.84||23.77||210.67||1.37||0||193.15||27.4||24.56||32.11||21.47||27.45||11122.76|
|8||Procter & Gamble Health Ltd||5636.9||38.09||31.78||52.93||33.65||703.97||1.99||0||292.6||29.08||21.96||29.96||16.36||106.51||9357.25|
|9||Glenmark Life Sciences Ltd||662.05||-||-||23.04||13.5||248.37||0||0||6.39||96.86||60.99||55.62||18.91||358.74||8111.91|
|10||Caplin Point Laboratories Ltd||907.8||42.72||34.03||26.56||17.09||174.76||0.68||0.02||248.79||32.46||25.73||20.58||19.84||34.18||6866.85|
|11||Aarti Drugs Ltd||624.6||21.9||24.87||23.74||15.8||150.27||0.73||0.38||16.4||34.27||35.81||22.63||16.77||26.19||5783.8|
|12||Ami Organics Ltd||1342.1||-||-||90.13||61.37||2640.81||0||0.82||13.82||32.72||38.93||19.46||16.82||17.14||4890.22|
|13||IOL Chemicals & Pharmaceuticals Ltd||608.55||44.03||44.88||9.06||5.59||25.64||0.13||0||92.42||54.29||43.07||36.11||31.99||65.41||3572.52|
|14||Marksans Pharma Ltd||70||21.13||17.3||11.38||7.48||36.76||0.46||0.04||43.59||38.9||31.17||25.97||22.28||6.15||2865.2|
|15||Amrutanjan Health Care Ltd||907.65||30.08||21.08||39.7||26.84||488.71||1.7||0.01||166.81||43.6||32.6||32.6||25.49||22.86||2653.12|
- ROCE % – Return on Capital Employed in percentage, per-annum.
- ROE % – Return on Equity in percentage, per-annum.
- P/E – Price to Earnings ratio.
- EV/EBITDA – Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization expenses.
- PEG – Price to Earnings Growth ratio.
- ROCE 5 Years – Return on Capital Employed in percentage, 5 years average.
- ROE 5 Years – Return on Equity in percentage, 5 years average.
Divis Laboratories Ltd
Dr. Murli K. Divi founded DLL in 1990. DLL is a generic API manufacturer, a nutraceutical manufacturer, and a custom synthesis (CS) manufacturer of APIs and intermediates for innovation firms. DLL operates six manufacturing facilities and three research and development centers throughout the states of Telangana and Andhra Pradesh.
DLL is one of India’s major pharmaceutical businesses, with a portfolio of 122 pharmaceuticals spanning multiple therapeutic categories. Divi makes money from both custom synthesis of APIs and intermediates for innovator firms and generic exports.
Abbott India Ltd
The firm was founded in 1888 by Dr. Wallace Abbott, an American physician, and reached Indian shores in 1910. AIL was incorporated in 1944.
Abbott India, a subsidiary of Abbott Laboratories, offers a diverse array of products across different therapeutic categories that aid in the treatment of some of the most persistent health disorders.
Abbott India Ltd is one of the largest multinational pharmaceutical firms in India. It is a subsidiary of Abbott Laboratories in the United States of America. Abbott Laboratories owned 75% of Abbott India as of March 31, 2018. The company is involved in the creation, manufacturing, and marketing of pharmaceutical, diagnostic, nutritional, and hospital goods.
They are present in both over-the-counter and prescription medications. Their manufacturing facility is at Verna, Goa. Prothiaden BrufenThyronorm and Leptos are among the company’s global goods. The company is divided into four divisions. The Primary Care section markets pain management and gastrointestinal medications.
Specialty Care-Methabolics and Urology offers treatment options for thyroid disease, obesity, diabetes, and benign prostatic hyperplasia. The Specialty Care-Neuroscience business offers a diverse product offering in the neurology and psychiatric divisions. Hospital Care supplies anesthesiology and neonatology products such as Forane, Sevorane, and Survanta.
Laurus Labs Ltd
Laurus was founded in September 2005 and is led by Dr. C Satyanarayana, the company’s Chief Executive Officer (CEO). In the fiscal year 2008, the company formed a strategic relationship with Aptuit (Singapore) P Ltd. (ASPL), a subsidiary of Aptuit Inc., a drug development services company headquartered in the United States. Aptuit Laurus P Ltd. was renamed Aptuit Laurus P Ltd. in July 2007 as a result of the strategic alliance.
ASPL sold 32% of its stake in Laurus to Fidelity Growth Partners India in February 2012. (FGPI). The company has been renamed Laurus Labs Pvt. Ltd. as a result of the equity sale. Warburg Pincus also purchased partial shares in Fidelity and a few other promoter associates in October 2014. Additionally, in December 2016, the company successfully completed an initial public offering (IPO), following which the company’s name was changed to Laurus Labs Limited.
Laurus had purchased a 100 percent stake in one of the group’s companies, Sriam Labs Limited (SLL), on November 1, 2016, for a consideration price of Rs.20.99 crore.
Laurus is driven by competent and experienced promoters and capable management staff that possess in-depth expertise and insight into the worldwide generic pharmaceutical industry environment.
Glaxosmithkline Pharmaceuticals Ltd
GlaxoSmithKline Pharmaceuticals Limited is one of India’s largest pharmaceutical firms. It is a subsidiary of GlaxoSmithKline plc, the world’s largest pharmaceutical and healthcare company based on research.
Prescription medications and vaccinations are included in the company’s product portfolio. Their prescription medications cover a broad spectrum of therapeutic disciplines, including anti-infectives, dermatology, gynecology, diabetes, cardiovascular illness, and respiratory disease.
Additionally, they offer a spectrum of vaccines for the protection of hepatitis A and B, as well as invasive diseases caused by H influenza, chickenpox, diphtheria, pertussis, tetanus, rotavirus, and cervical cancer. They have two production facilities in India, one in Nashik and another in Thane.
Alembic Pharmaceuticals Ltd
Alembic Pharmaceuticals is a company that develops, manufactures, and markets pharmaceutical products, specific formulations, and active pharmaceutical ingredients.
The corporation operates three research and development centers and five manufacturing plants.
Alembic Ltd’s pharmaceuticals division, which includes domestic formulations, overseas generics, and active pharmaceutical ingredients, was transferred to Alembic upon the latter’s April 1, 2010 demerger from AL. Alembic, headquartered in Vadodara, produces a variety of formulations and bulk pharmaceuticals for both the domestic and international markets.
Alembic is a public company listed on the Bombay and National Stock Exchanges. The promoter and group entities owned approximately 73 percent of the company as of March 30, 2020, with the remainder controlled by international portfolio investors and the general public.
Suven Pharmaceuticals Ltd
Suven Pharma is a contract development and manufacturing organization (CDMO) that serves the global pharmaceutical industry.
SPL, founded in November 2018, is a biopharmaceutical firm specializing in Contract Research and Manufacturing Services (CRAMS) based on New Chemical Entities (NCEs) for global life science organizations. Mr. Venkateshwarlu Jasti is the promoter and the company is situated in Hyderabad, Telangana.
The company now has approximately 120 ongoing CRAMS projects. SPL is one of India’s top five providers of high-end intermediaries to innovators. On March 09, 2020, SPL was listed on the Bombay Stock Exchange and the National Stock Exchange.
Suven Pharma Inc. is a completely owned subsidiary of Suven Pharmaceuticals Limited. It is a special purpose vehicle established to invest in Rising Pharma Holdings Inc. Suven Pharma Inc. owns 25% of Rising Pharma Holdings Inc. Rising Pharma Holdings Inc, is a pharmaceutical company situated in New Jersey, USA. It is focused on the development of generic pharmaceutical products in a variety of therapeutic areas.
ERIS Lifesciences Ltd
ERIS Lifesciences is a pharmaceutical company that manufactures and markets medicinal products.
Eris Pharmaceuticals, founded in 2007, develops and distributes pharmaceutical formulations in the home market. It is headquartered in Ahmedabad (Gujarat) and manufactures in Guwahati. Chronic therapies such as CVS, anti-diabetic, and others account for more than 60% of sales, while the acute segment accounts for the remainder.
Procter & Gamble Health Ltd
P & G, erstwhile Merck Limited, is a pharmaceutical and chemical company that manufactures and markets pharmaceuticals, bulk medications, fine chemicals, and pigments.
Merck Limited (previously E. Merck Limited) was established in India in 1967, making it the Merck Group’s first Asian subsidiary. Merck Limited became the first business to go public in 1981. Merck Limited’s share capital was 51.8 percent owned by the Merck Group, while the remaining 48.2 percent was publicly traded on the Bombay Stock Exchange and the National Stock Exchange.
The corporation operated in two segments, primarily pharmaceuticals and chemicals. Vitamins, nutritional supplements, cardiovascular, respiratory, hematinics, cough and cold, non-steroidal anti-inflammatory (NSAID), antibiotics, oral rehydration salts, and encephalotropics are prominent products in the Pharmaceutical section.
Glenmark Life Sciences Ltd
Glenmark Life Sciences, a subsidiary of Glenmark Pharmaceuticals Ltd, is a market leader in the development and manufacture of a limited number of high-value Active Pharmaceutical Ingredients. Additionally, the company provides contract development and production services to specialty pharmaceutical companies.
GLS was once GPL’s API business unit. Since 1 January 2019, the API business has been transferred to a wholly-owned subsidiary of GPL. GPL began its API business in 2003 for captive consumption and export sales of APIs. By the end of August 2020, GLS had filed over 399 DMFs in a variety of markets, including the United States, Europe, Brazil, Canada, Japan, and Russia.
Caplin Point Laboratories Ltd
Caplin Point Laboratories Ltd. is a manufacturer and supplier of APIs, finished formulations, R&D, and clinical research with operations in Latin America, Africa, the United States of America, and other countries.
The company formulates pharmaceuticals in the form of tablets, ointments, and capsules, as well as liquid orals and oral powders. Caplin Steriles Limited, Argus Salud Pharma LLP, Caplin Point Far East Limited-Hong Kong, and Caplin Point Laboratories Colombia SAS-Colombia are the Company’s four subsidiaries as of 31 March 2019.
The company entered into a technical agreement with American Remedies and Concord Laboratories US for the purchase of specified items at a 30% discount. Additionally, it imports biotechnology items for marketing in India. The company has opened a trading unit in Nairobi, Kenya, to distribute its products throughout East Africa. Additionally, it opened a warehouse in Miami, United States of America, through a marketing alliance with Lockett Medical Corporation.
Aarti Drugs Ltd
ADL, founded in 1984, develops active pharmaceutical ingredients (APIs), formulations, advanced intermediates, and specialty chemicals; APIs account for about 80% of total sales. ADL operates 11 manufacturing sites in Maharashtra and Gujarat that are certified to adhere to good manufacturing principles. The company is present in more than 90 countries. It is traded on both the Bombay and National Stock Exchanges.
Aarti Drugs Limited (ADL) is a manufacturer and distributor of Active Pharmaceutical Ingredients (APIs), Pharmaceutical Intermediates, Specialty Chemicals, and Formulations.
It exports its active pharmaceutical ingredients and specialty chemicals to over 100 countries worldwide.
PLSPL is a pharmaceutical formulation manufacturer and packager founded in 2003. In September 2014, ADL purchased PLSPL, converting it to a wholly-owned subsidiary. In December 2014, PLSPL resumed commercial operations. ADL meets the majority of its criteria for active pharmaceutical ingredients (APIs).
Ami Organics Ltd
Ami Organics Limited is a market leader in the research and development of specialized chemicals. The company produces a variety of Advanced Pharmaceutical Intermediates (APIs) and Active Pharmaceutical Ingredients (APIs) for New Chemical Entities, as well as raw materials for agrochemicals and fine chemicals.
IOL Chemicals & Pharmaceuticals Ltd
IOL was founded as a public limited company on September 29, 1986, by Mr. Varinder Gupta and Mr. Rajinder Gupta (promoters of Trident Limited) with the objective of establishing an acetic acid manufacturing facility. IOL’s manufacturing facility is located in Barnala, Punjab, and will have a total capacity of 1,35,068 Metric Tonnes Per Annum (MTPA) by March 31, 2021.
IOL is a manufacturer of chemicals (such as ethyl acetate, acetyl chloride, and iso-butyl benzene) and active pharmaceutical ingredients (Ibuprofen, metformin, etc.). As of March 31, 2021, Ibuprofen’s total installed capacity is 12000 MTPA.
IOL Chemicals & Pharmaceuticals is a manufacturer and distributor of active pharmaceutical ingredients (APIs), bulk pharmaceuticals, and specialty chemicals. The enterprise serves both the domestic and foreign markets.
Ibuprofen, metformin hydrochloride, lamotrigine, fenofibrate, and clopidogrel bi sulphate are just a few of the APIs manufactured. They are used in a variety of therapeutic categories, including pain management, anti-diabetic, anti-hypertensive, anti-convulsant, anti-cholesterol, and anti-platelet. Additionally, it supplies specialty industrial chemicals such as ethyl acetate, iso butyl benzene, and acetyl chloride.
IOL is a subsidiary of India’s Trident Group.
Marksans Pharma Ltd
Marksans Pharma is in the business of medicinal product formulation.
Primary emphasis areas include over-the-counter and prescription medications with a broad range of applications in sectors such as oncology, gastroenterology, anti-diabetes, antibiotics, cardiology, pain management, and gynecology, among others.
In 2001, Glenmark Pharmaceuticals Ltd. formed Marksans as a completely owned subsidiary. It was split off into a separate corporation in 2003. The company is involved in the research, development, production, and marketing of generic medications.
Marksans is headquartered in Mumbai and operates subsidiaries in the United Kingdom, the United States of America, and Australia, all of which have their own marketing networks. The company operates three manufacturing facilities—one in India, one in the United Kingdom, and one in the United States—as well as a research and development center in Navi Mumbai.
Amrutanjan Health Care Ltd
Founded in 1893 by the late Mr. K Nageswara Rao Pantulu, AHCL manufactures ayurvedic over-the-counter (OTC) healthcare goods. Mr. Sambhu Prasad, the chairman, and managing director, oversees operations. Under the labels Kick out Pain, Treatment, and Purity, the company’s goods are largely focused on pain relief, congestion management, and personal hygiene. Additionally, AHCL sells beverages under the Fruitnik brand and sanitary napkins under the Comfy name.
AHCL is a Bombay Stock Exchange and National Stock Exchange-listed company.
Since 1893, AHCL has been making ayurvedic balms for pain relief. The company is now run by the third generation of promoters. The company, which is over 120 years old, manufactures over-the-counter (OTC) goods in pain management, women’s hygiene, and packed fruit juice drink categories.
Pharma firms are confronted with hurdles as factories operate with reduced manpower capacity, producing critical and scarce medications. Nonetheless, the pharmaceutical industry is one of the least hit sectors by the pandemic, and robust demand for vital pharmaceuticals will help companies thrive.
Despite the volatility, pharmaceutical businesses might be beneficial to long-term investors. With the industry’s size growing at a rapid pace and healthcare being an integral part of life, investors can earn a profit if they invest at the correct time. Additionally, as a dynamic business, many pharmaceutical companies see exponential growth as a result of innovation, scientific breakthroughs, and technological advancements.
Apart from that, investors should seek out pharmaceutical companies with fundamentally stable balance sheets, a track record of FDA clearance, and management expertise. Businesses should have a clear path to growth and the ability to rebound from downturns.
Consistently strong return ratios, a low debt-to-equity ratio, profit margins, R&D expenditure, medications in various stages of approval in the pipeline, and drug patents should all be considered when investing in a pharmaceutical company.
Disclaimer: All the information on this website is published in good faith and for general information purpose only.