ICICI Securities: India Pharma Market Resilient And Growth Pick-Up To Sustain Premium Valuations
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ICICI Securities Report
As per All India Organisation of Chemist and Druggist, the Indian pharmaceutical market reported decent recovery in June with 2.4% growth after reporting decline of 11.2% in April and 8.9% in May. We believe Indian pharma industry is quite resilient in the current pandemic and we don’t expect any material structural impact on pharma sector. We expect improvement in growth rate to continue in the ensuing months as restrictions in lockdown ease further.
U.S. generics business has stabilised after few years of consistent decline with stable pricing and faster approvals. Pharma sector is relatively defensive as it offers long-term growth sustainability with minimal demand impact. Hence, we remain positive on the sector and expect recent re-rating of the valuations to sustain.
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