Pricing Pressures To Weigh On India’s Pharma Firms: Morgan Stanley’s Sameer Baisiwala

Shares of Indian pharmaeutical companies have seen substantial weakness over the last few months with the Nifty Pharma Index falling nearly 11 percent in May. Sameer Baisiwala, pharmaceutical and property analyst at Morgan Stanley India believes that pricing pressures will continue to hurt the sector as super normal profits are now shrinking, in turn eroding valuations. He was speaking to BloombergQuint on the sidelines of the Morgan Stanley Annual India Summit.

He believes that facilities falling back in compliance with the U.S. FDA and other regulators as well as new approvals could revive the sector in the next 2-3 years.

He is bullish on the hospital and diagnostics segment.

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Baisiwala, who also tracks the real estate sector at Morgan Stanley India, said the Real Estate (Regulation & Development) Act will boost growth in the sector. "The size of the Indian [real estate] market is $100 billion. This could go ahead to early mid-teens in next 5 years period and this should accelerate to mid-teen plus from 2021-25,” he added.

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