Indian pharmaceutical resort to home remedy as tariff malady tissue

Copyright © HT Digital Streams Limit all rights reserved. Operations that focus on the Indian pharmaceutical market are likely to provide a hedging against the ongoing tariff -lingering, although the fate of the broader sector according to analysts is uncertain. (Pixabay) Summary of US market exposure limits Indian Pharma’s secure appeal amid global volatility and tariff fears, but drugs focused on domestic markets, investors may have a possible hedging against uncertainty Mumbai: When the world under President Trump’s reciprocal rates on April 3, the Indian pharmacity raised, starting the onset of the start of the starting batsman, the Indian pharmaceutical industry. Then Trump threatened that Pharma would not be spared and renewed anxiety. The one corner of the sector still offers hope. Companies that focus on the Indian pharmaceutical market are likely to provide a hedging against the ongoing tariff, although the fate of the wider sector according to analysts is uncertain. Shares of India-focused Mankind Pharma Ltd, Alkem Laboratories Ltd, Abbott India Ltd and JB Chemicals & Pharmaceuticals Ltd have only dropped 3-5% since the reciprocal rates have been announced. With only 10% exposure to the US, Torrent Pharmaceuticals fell about 4%. By comparison, Aurobindo Pharma Ltd, Divi’s Laboratories Ltd, Glenmark Pharmaceuticals Ltd and Granules India Ltd each tumbled in the last five trading sessions about 6-10%. The US accounts for 30-50% of their revenue. “As growth in US -generic business plateaus due to poorer demand and stiffer competition, Indian pharmaceutical companies have increasingly used the domestic brand medicine and health products market, which has plenty of space to grow,” says Prashant Nair, Lead -Pharmaceutical and Health Care analyst at Ambit Capital. Even without rates, “it would be better (for investors) to focus on India, as American generics are a very cyclical business, and valuations of those stocks are not cheap.” The Trump administration imposed rates on various trading partners, including a 27% levy on large Indian exports to the US. He also wants to climb back drug manufacture. According to a Nuvama Institutional Stock Report, the US of $ 110 billion is from Europe. Read also | Indian pharmaceutical enterprises escape from Trump’s reciprocal rates, for now the Indian pharmaceutical industry of $ 50 billion is exporting thousands of drugs worth $ 10 billion to the US market, mostly cheaper generic. Earn “higher valuation” against this background, and domestic focused companies earn a higher valuation due to their inherent operational stability and better growth prospects compared to US generic medicine manufacturers, said Tausif Shaikh, Indian pharmaceutical and health care analyst at BNP Paribas. In a center broker report, the majority of broker’s portfolio growth is expected to be led in the March (Q4FY25) by domestic formulations, which increase by 12% year-on-year, compared to a 5% increase in US sales. “Among the domestic focused companies, those who provide chronic treatments such as cardiology and anti-diabetes are placed more positively and are expected to perform better than the domestic market in the fourth quarter,” Sumit Gupta, analyst of the health care at Center Broking, told Mint. According to Shaikh of BNP Paribas, the domestic focus of the industry was also visible in mergers and acquisitions. ‘We have not yet seen significant M & AS or investments (from domestic players) in the US market. Companies are aware that they need to invest more in India, ‘he said. ‘They either go through licensing or rushing inorganic growth to increase their presence in the local market, as the global side is volatile at the moment. “Not everything is lost to be sure, there is still no clarity on tariffs on drug exports to the US. However, rates will not play the downfall and gloom for all Indian drug exporters. Companies with a larger part of the biosymilars, specialty medicines and nichen generics in their American portfolios are better positioned to weather the tariff pain, Pharmaceutical businesses have a 47% share and 15% in generics and biosimylaries in the US respectively, according to IQVIA data. industries) is better positioned than a large part of its US business, specialty products are where price power is higher than generic, “says Nair of Ambit Capital. In a Kotak Institutional Shares Report, however, that while the limited availability of substitutes will make high prices for its specialty. to transfer patients. Read also | New introductions and price growth that drive pharmaceutical market growth according to Sreeram Ramdas, vice president of Green Portfolio PMS, complex generics such as biosimylars and injectable products recommend 40-60% gross margins compared to 15-25% for commodity generic. Therefore, it is easier for business margins of more than 25% to take up any tariff shock while retaining their market share, “he said.” We could see a limited erosion of 200-400 BPS (base point) over the overall margins of the largest Indian US generic manufacturers. of more than 10%, most experts expect Indian businesses to pass on to distributors, insurance providers and US consumers. is, they said. “If you can risk the supply chain by establishing facilities outside India, it will drive higher valuation mids for domestic pharmaceutical enterprises.” Catch all the industry news, bank news and updates on live currency. Download the Mint News app to get daily market updates. More Topics #Pharma #Pharmaceutical Mint Specials