The Indian pharma industry is expected to register subdued growth of 12-13 per cent in 2011 due to weak macro factors and increasing competition from unlisted players and MNC pharma companies,an industry analyst said here. Domestic Indian companies are the ones that will be impacted the most by this slowdown. "We expect 2011 will be a subdued year in terms of growth of the pharma industry. The industry will grow by 12-13 per cent in 2011,which will rebound in 2012 to normal growth of 14-15 per cent," Emkay Global Financial Services Senior Research Analyst Deepak Malik said in a pharma sector research report. The domestic formulations industry,which contributes 38 per cent of total revenues of the pharma industry,grew by 19 per cent to Rs 1,700 crore in the 2011 financial year. However,with increased competition and price pressure,the growth in revenues from pharma sales in the domestic market slowed down to 13.5 per cent in the first half of 2011 and is set to decline further to 12 per cent in the 2012 financial year. "We expect FY'13 sales to grow by 15 per cent,with improvement in field force productivity and a focus on chronic therapies," Malik said. Rising disposable income and favourable income demographies are the major catalysts responsible for the growth of the pharma sector in the country. However,slowing down of the economy and salary growth has impacted the growth of the industry. With the increase in interest rates,the capital expenditure on new medical infrastructure will also slow down,as it is a capital-intensive segment. Growth in insurance penetration will also slowdown,resulting in an overall slowdown in the growth of the Indian pharma sector,Emkay Research Associate Bhavita Nagrani said. Growth in the anti-infective segments has slowed down during the past two quarters due to an increase in competition and price pressure,both from local peers as well as MNCs. The competition in the top 20 brands in the Indian pharma market is also increasing,with the average growth in sales of these products slowing down to a single digit,Nagrani said. The impact of the slowdown in growth is more pronounced in mid and small-cap companies.
