Though an anticipated delay in a key product approval in the US had kept investors’ confidence subdued, the stock has rebounded with gains of more than 8 per cent in September.
Lupin, too, posted domestic sales that were ahead of the market’s growth. According to analysts, this was driven by its high exposure to chronic therapies (half of its domestic revenue). This should help mitigate concerns, regarding growth in the US market, led by regulatory hurdles and consequently product approvals.
Both Dr Reddy’s as well as Lupin featured in the top 10 growing companies
in the country.
The Street is also positive on Cadila Healthcare’s comeback. The company has clocked double-digit growth for the third consecutive month. Earlier, with Cadila rationalising its domestic portfolio, sales grew only in single digits.
However, not only does its sales growth instil confidence now, but it also gives credence to the management’s earlier commentary that portfolio rationalisation will be done by Q1FY20 and growth will return to normal.
Sun Pharma, the largest player by market value, grew ahead of the domestic pharma market for the second consecutive month, say analysts. They, however, remain cautious on Sun Pharma awaiting the outcome of a forensic audit by Sebi.
Among others, Alkem Laboratories appeared in the list of the top 10 fastest growing companies, while Ajanta Pharma and Torrent Pharmaceuticals, too, are expected to benefit from strong growth in the domestic market, considering their focus and exposure to India.
All this is helping firms offset challenges that they face in the world’s largest healthcare market — US.
Domestic sales are expected to remain healthy for them, which, along with reasonable valuations, suggests some of these quality names could be good investments.