Blog: The Pharma-Sector in India

Blog: The Pharma-Sector in India

  • Posted by @dmin-IndiaTrading
  • On April 25, 2022
  • 0 Comments
  • equity, India, investment, Sustainability

The Indian pharmaceutical industry has become a leading factor globally and supplies over 50% of global demand for various vaccines, 40% of generic medicine in the US and 25% of all medicine in the UK. The Indian pharmaceutical industry includes a network of 3,000 drug companies and close to 10,500 manufacturing units. Due to the lower value of generic drugs (generic drugs is drugs which no longer has a patent), India ranks 14th globally by value of production, but 3rd in volume at just above 40 billion USD annually. Domestically In India, the market is expected to grow three times the next 10 years, and reach 120 – 130 billion USD in 2030.

A number of the large multinational pharmaceutical companies is important for the industry in India, but also a few large Indian players that are investable, those are:

  • Sun Pharmaceutical Industries Ltd.
  • Dr. Reddy’s Laboratories Ltd.
  • Divi’s Laboratories Ltd.
  • Cipla Ltd.

Sun Pharmaceutical Industries is the largest company from the pharmaceutical industry based in Mumbai, listed at Nifty 50 with 1,3 % of the index. It is a market leader in a number of different sectors, with a focus on generic drugs.  70 % of its sales comes from outside India, where USA stands for 30 %. Dilip Shanghvi and his family, who founded the company still has a substantial ownership with more than 50 %.

Dr. Reddy’s Laboratories is a smaller player than Sun Pharmaceutical, but still listed at Nifty 50 with about 0,7 % of the index. It is based in Hyderabad and has a broad range of products, both pharmaceutical and biotechnology based.  It also has a large focus on generic drugs. The company was established by Kallam Anji Reddy who still owns more than 20 % of the company.

Divi’s Laboratories is also about 0,7 % of the Nifty 50. It is also based in Hyderabad, and has a large focus on generic drugs production, in addition to nutraceutical ingredients. The company is also majority owned by its founders with more than 50 %.

The fourth pharmaceutical company at the Nifty 50 is Cipla, at about 0,7 % of the Index. It focuses on a broad range of sectors, where it e.g is the world’s largest manufacturer of antiretroviral drugs. It is based in Mumbai and owned by its founders of about 13 %.

India is also a large player when it comes to biotechnology, where the industry was valued at 70 billion USD in 2020 and is expected at 150 billion USD in 2030. This includes a number of different subsectors. The third area to mention is medical devises, where the industry was valued at 10 billion USD in 2020 and is expected to reach 50 billion USD in 2030.

India is the 12th largest exporter of medical goods in the world, with 25 billion USD in FY21 (01.04.20 – 31.03.21). It exports to more than 200 countries where USA is the most important with 34 %.  Generic drugs export is more than 20 % of the total volume globally, which make India the largest exporter in the world

Going forward it is expected that medical spending in India will grow at 10-12% annually for five years, moving the country significantly higher on the list of countries related to medical spending. This is however dependent on good development of medicine focusing on the biggest medical problems in India like diabetes, cancer, depression etc.

Source: IBEF.Org