indian listed pharma companies - brief data review
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Listed Pharma Companies - Brief Data Review
Sector: Lifesciences
Sep 2015
Valuations and Market Data
www.indiabusinessreports.com Listed Pharma Stocks in India
Pharma Sector has enjoyed a phenomenal 3 year bull run in India
www.indiabusinessreports.com 3Listed Pharma Stocks in India
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IBR Pharma Universe CAGR (FY12-FY15)
Key stats..
www.indiabusinessreports.com 4Listed Pharma Stocks in India
Sector market cap up 3x in the 3 year period FY12-FY15
Sector CAGR return was 42% over the 3 year period
MNCs gave poor returns, Abbott and Pfizer the exceptions
Ajanta, Alembic and Granules up more than 10x in this period
Sun retains No 1 rank, increases relative market share over FY12 to FY15
www.indiabusinessreports.com 5Listed Pharma Stocks in India
Source: India Business Reports
Company Name Sep-15 Rank MC Share Rank Mar-12MC-Share
(Mar'12)
Sun Pharmaceutical Inds. 2,20,149 1 30.2% 1 23.7%
Lupin 83,402 2 11.4% 4 8.7%
Dr. Reddy'S Laboratories 71,586 3 9.8% 2 13.1%
Cipla 52,108 4 7.1% 3 10.5%
Aurobindo Pharma 42,268 5 5.8% 13 1.8%
Cadila Healthcare 37,130 6 5.1% 6 6.8%
Glaxosmithkline Pharmaceuticals 28,689 7 3.9% 5 8.2%
Torrent Pharmaceuticals 27,975 8 3.8% 9 2.3%
Divi'S Laboratories 27,957 9 3.8% 7 4.5%
Glenmark Pharmaceuticals 27,292 10 3.7% 8 3.7%
Alembic Pharmaceuticals Ltd 13,158 11 1.8% 23 0.4%
Ajanta Pharma Ltd. 12,526 12 1.7% 25 0.2%
Abbott India 11,553 13 1.6% 16 1.4%
Ipca Laboratories 9,465 14 1.3% 12 1.8%
Company Name Sep-15 Rank MC Share Rank Mar-12MC-Share
(Mar'12)
Sanofi India Ltd. 9,247 15 1.3% 10 2.2%
Biocon 8,670 16 1.2% 11 2.1%
Natco Pharma 7,354 17 1.0% 21 0.5%
Pfizer 7,066 18 1.0% 14 1.6%
Strides Arcolab 6,576 19 0.9% 15 1.5%
Jubilant Life Sciences Ltd. 5,066 20 0.7% 17 1.4%
F D C 3,651 21 0.5% 19 0.7%
Shilpa Medicare 3,608 22 0.5% 24 0.3%
Novartis India 2,614 23 0.4% 18 1.1%
Unichem Laboratories 2,356 24 0.3% 20 0.6%
Granules India Ltd. 2,349 25 0.3% 28 0.1%
J B Chemicals & Pharma 2,220 26 0.3% 26 0.2%
Dishman Pharmaceuticals 2,076 27 0.3% 27 0.2%
Merck 1,273 28 0.2% 22 0.4%
Apart from Sun, lot of churn in top positions. Lupin gained over Dr Reddy and Cipla to emerge No 2 Biggest gainers – Aurobindo Pharma, Alembic and Ajanta Pharma. Losers – all MNCs + Biocon, IPCA, Divi’s, Glenmark, Strides (due to business sale), Jubilant
Though with a little stumble post Ranbaxy acquistion
www.indiabusinessreports.com 6Listed Pharma Stocks in India
Source: India Business Reports
Company Name Sep-15 Rank MC Share Company Name 31-03-2015 Rank MC Share
Sun Pharmaceutical Inds. 2,20,149 1 30.2% Sun Pharmaceutical Inds. 2,22,654 1 33.6%
Lupin 83,402 2 11.4% Lupin 91,294 2 13.8%
Dr. Reddy'S Laboratories 71,586 3 9.8% Dr. Reddy'S Laboratories 58,447 3 8.8%
Cipla 52,108 4 7.1% Cipla 57,006 4 8.6%
Aurobindo Pharma 42,268 5 5.8% Cadila Healthcare 33,792 5 5.1%
Cadila Healthcare 37,130 6 5.1% Glaxosmithkline Pharmaceuticals 28,376 6 4.3%
Glaxosmithkline Pharmaceuticals 28,689 7 3.9% Divi'S Laboratories 23,789 7 3.6%
Torrent Pharmaceuticals 27,975 8 3.8% Glenmark Pharmaceuticals 21,323 8 3.2%
Divi'S Laboratories 27,957 9 3.8% Torrent Pharmaceuticals 20,190 9 3.0%
Glenmark Pharmaceuticals 27,292 10 3.7% Aurobindo Pharma 18,219 10 2.8%
Alembic Pharmaceuticals Ltd 13,158 11 1.8% Biocon 9,320 11 1.4%
Ajanta Pharma Ltd. 12,526 12 1.7% Abbott India 8,543 12 1.3%
OTHERS OTHERS
SECTOR TOTAL 7,29,285 100.0% 6,62,410 100.0%
Sun fell from Rs1200 levels in Apr’15 to around Rs 800, but have recovered a bit to above Rs 900 levels. In market cap terms loss is less, since equity expanded due to Ranbaxy merger.
Sector market cap has grown 10% in this period, signifying clear underperformance by Sun
Valuations may now face a period of consolidation
www.indiabusinessreports.com 7Listed Pharma Stocks in India
Company Name Market Cap P/E Profit CAGR
Profit CAGR
EV/ EBITDA
EBITDA CAGR
P/S Sales CAGR
(Rs Cr) (x) 3 Year 5 Year 3 Year 3 Year1 Sun Pharmaceutical Inds. 2,20,149 48.5 15.0% 27.4% 26.5 30.2% 8.1 50.1%
2 Lupin 83,402 34.1 39.7% 29.1% 21.1 37.7% 6.5 21.5%
3 Dr. Reddy'S Laboratories 71,586 30.6 17.8% 46.1% 19.5 16.7% 4.8 15.6%4 Cipla 52,108 41.5 3.7% 3.0% 23.2 10.3% 4.6 17.4%
5 Aurobindo Pharma 42,268 26.9 22.8% 17.3 114.1% 3.5 37.4%6 Cadila Healthcare 37,130 31.3 20.1% 17.5% 21.6 16.4% 4.3 17.8%7 Glaxosmithkline Pharmaceuticals 28,689 60.2 3.6% 34.5 1.5% 8.7 10.9%8 Torrent Pharmaceuticals 27,975 37.3 37.5% 26.6% 22.6 39.1% 6.0 19.7%
9 Divi'S Laboratories 27,957 32.8 16.7% 20.1% 22.3 17.3% 8.9 18.8%
10 Glenmark Pharmaceuticals 27,292 57.4 0.8% 7.5% 27.5 12.4% 4.1 18.0%11 Alembic Pharmaceuticals Ltd 13,158 46.5 29.2% 48.2% 33.0 22.3% 6.4 11.8%
12 Ajanta Pharma Ltd. 12,526 40.4 58.1% 24.0 51.1% 8.5 29.4%13 Abbott India 11,553 50.4 23.6% 24.1% 30.4 22.4% 5.0 15.5%
14 Ipca Laboratories 9,465 36.5 4.8% 16.8 6.3% 3.0 9.9%
Valuations ahead of reality. PE ratios for example are ahead of 3/5 year profit CAGRs Most large caps need to see a period of valuation adjustment
Growth priced into almost all pharma stocks now
www.indiabusinessreports.com 8Listed Pharma Stocks in India
Company Name Market Cap P/E Profit CAGR
Profit CAGR
EV/ EBITDA
EBITDA CAGR
P/S Sales CAGR
(Rs Cr) (x) 3 Year 5 Year 3 Year 3 Year15 Sanofi India Ltd. 9,247 35.1 11.2% 10.9% 19.0 14.0% 4.7 14.4%
16 Biocon 8,670 16.4 15.8% 12.5% 9.1 13.7% 2.8 13.8%
17 Natco Pharma 7,354 56.5 30.2% 35.7 21.4% 8.9 16.5%18 Pfizer 7,066 101.2 -27.5% -12.6% 17.9 5.4% 3.8 18.9%
19 Strides Arcolab 6,576 7.8 52.7% 50.4% 8.6 20.9% 5.5 -22.4%20 Jubilant Life Sciences Ltd. 5,066 0.0% -162.5% 12.8 7.8% 0.9 10.5%21 F D C 3,651 24.7 3.3% 13.7 8.3% 4.1 7.7%22 Shilpa Medicare 3,608 49.7 20.4% 28.2 24.0% 5.9 24.2%
23 Novartis India 2,614 33.1 -19.4% -7.4% 17.9 -24.9% 3.0 1.1%
24 Unichem Laboratories 2,356 31.3 -3.0% -10.9% 19.0 -3.8% 2.0 14.2%25 Granules India Ltd. 2,349 25.8 44.2% 12.9 37.8% 1.8 25.2%
26 J B Chemicals & Pharmaceuticals 2,220 22.1 -46.8% -3.4% 9.8 -39.9% 2.1 9.7%27 Dishman Pharmaceuticals & Chemicals 2,076 17.3 27.9% 0.4% 7.3 18.7% 1.3 11.8%
28 Merck 1,273 29.5 -12.0% -8.0% 13.5 -8.4% 1.5 15.5%
Only a pharma company with very strong growth prospects can sustain current valuations Even stocks with traditionally conservative growth record, like Unichem, FDC have seen surge in valuation
Sample Business Data
www.indiabusinessreports.com Listed Pharma Stocks in India
Divi’s and Ajanta reported best margins in FY15
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Margins reported by Indian Pharma Cos
EBITDA Margin PAT Margin
Growth of exports as a % of revenue halted in FY15
www.indiabusinessreports.com 11Listed Pharma Stocks in India
For Sun, Cipla, Torrent, Divi’s, Glenmark – share of domestic revenues grew However, export growth remains the focus area of Indian pharma.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Sun Pharma
Lupin
Dr. Reddy's Laboratories
Cipla
Aurobindo Pharma
Cadila Healthcare
Torrent Pharma
Divi's Lab
Glenmark
Alembic Pharma
Ajanta Pharma
Ipca Lab
Biocon
Natco Pharma
Strides Arcolab
Jubilant Life
Domestic / Export Sales
Domestic Exports
US market is the dominant geography for most Indian pharma companies
www.indiabusinessreports.com 12Listed Pharma Stocks in India
0% 10% 20% 30% 40% 50% 60%
Sun Pharma
Lupin
Dr. Reddy's Laboratories
Cipla
Aurobindo Pharma
Cadila Healthcare
Torrent Pharma
Divi's Lab
Glenmark
Ipca Lab
Natco Pharma
Jubilant Life
US Markets as % of total company turnover for FY15
Sun gets around USD 2.2B of revenue from US. In FY14, contribution of US market was 61%, down due to Ranbaxy Cipla is one major which has a different mix. It is also looking to boost US turnover now. FY17 expected to be a big year for Cipla
R&D spends up in FY15, most companies talking of higher spends going ahead
www.indiabusinessreports.com 13Listed Pharma Stocks in India
R&D spends increased for most companies in FY15. Increasing focus on decoding chemistry for complex molecules is leading to increase in R&D spends Dr Reddy, Biocon and Glenmark are highest spenders on R&D. Glenmark seems to book only about 20% through P&L
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Sun Pharma
Lupin
Dr. Reddy's Laboratories
Cipla
Aurobindo Pharma
Cadila Healthcare
Torrent Pharma
Divi's Lab
Glenmark
Alembic Pharma
Ajanta Pharma
Ipca Lab
Biocon
Natco Pharma
Jubilant Life
R&D Spends (% to sales)
FY15 FY14
Average employee salary around Rs 8-10 lakh per annum
www.indiabusinessreports.com 14Listed Pharma Stocks in India
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Sun Pharma Lupin Dr. Reddy'sLab
Cipla AurobindoPharma
CadilaHealthcare
TorrentPharma
Divi's Lab Glenmark AlembicPharma
Ajanta Pharma Ipca Lab Biocon Natco Pharma Jubilant Life
Employee Salaries for FY 15 (Rs Lakh per annum)
Ajanta Pharma appears, the best performing stock, is also the lowest paymaster, paying half of industry average. Ipca, Alembic, Natco also have similar low pay
Aurobindo, the other top performing stock, has much more realistic pay figures. Sector leader Sun also appears to be among the top paymasters
Clear difference in field force productivity between leaders and the rest
www.indiabusinessreports.com 15Listed Pharma Stocks in India
0 10 20 30 40 50 60 70 80
Sun Pharma
Lupin
Dr. Reddy's Lab
Cadila Healthcare
Torrent Pharma
Alembic Pharma
Ajanta Pharma
Ipca Lab
Field Force Productivity for FY15 (Rs Lakh per annum)
Sun leads. Its productivity was much higher in FY14, down due to Ranbaxy influence, but much above the rest Ajanta has least (among those where data was available). Rapid expansion in field force could possible explain low productivity
Lower DMF filing in recent quarters
www.indiabusinessreports.com 16Listed Pharma Stocks in India
Period Total DMFs filed % %age of Indian DMFS
1Q 13 132 61 46%
2Q 13 140 75 54%
3Q 13 155 65 42%
4Q 13 178 81 46%
20 13 605 282 47%
1Q 14 154 88 57%
2Q 14 199 88 44%
3Q 14 89 31 35%
4Q 14 127 51 40%
20 14 569 258 45%
1Q 15 193 96 50%
2Q 15 126 45 36%
2015 YTD 319 139 44%
Key Indian DMF filings in Q2
www.indiabusinessreports.com 17Listed Pharma Stocks in India
DMF Filer Molecule / Brand Dosage Form
Genericized US Annual Sales ($ mn)
Comments
Cipla Albendazole USP (gAlbenza) Tablet No 105** Product has gone offpatent, but nor genercized yet; other filers are Sequent Scientific, Uquita and Unimark
Cipla Ambrisentan (gLetains) Tablet No 595* Patent expires in 2015; Liley generic launch by end 2015; other filers are Mylan, Watson and MSN Labs
Alembic Azilsartan (gEdarbi/gEdarbyclor) Tablet No 37** NCA exclusivity till Feb’16; Other patent exipry in 2025; no other DMF filer
Aurobindo Ranolazine (gRanexa) Tablet ER Yes 510* Lupin only generic to launch; Patent expiry in 2019; there are 10 other filers
Sun Tadalafil (gCialis) Capsule No 1040 Patent expiry in Nov’2017; other 17 filers and one tentative approval
Auro Peptides (Aurobindo)
Octreotide Acetate (gSandostatin) Injectible Yes 1750* Sandostatin genercized with 7 generic players; However SandostatinLR not genercized with patent expiry in 2017
Aurobindo Esomeprazole (gNexium) Capsules, Pallets
Yes 1876 Teva has already launched; other generic players to launch in H2Fy16
Cipla Olanzapine (gZyprexa Zydis) Tablet/Capsule/Inj.
Yes 120 Many generic players
AuroNext(Aurobindo)
Sodium Bicarbonate Injectible Yes NA Off patent; 6 other DMF filers
Lupin Darunavir Propanolate (gPrezista) Tablet/Susp No 1831 Other key DMF filers are Cipla, Hetero and Mylan
*Global Sales; **Bloomberg Global Sales
Disclaimer
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Listed Pharma Stocks in India
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