Lupin, Glenmark, JB chemicals, Cipla, Aurobindo potential winners to ride $183 bn cardiac therapy market

Cardiovascular disease (CVD) is the leading cause of mortality and accounts for one-third of global deaths. Cardiac has displaced anti-infectives as the leading therapy in the India Pharma Market (IPM).  

Cardiac is the largest therapy with Rs183bn in size in the Indian pharma market (IPM), accounting for ~13 per cent share in it and growing at a steady rate of 10 percent CAGR.  

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HDFC Securities Institutional Research see the market to grow for the next 10 years, and stocks that are likely to benefit the most include names like Lupin, Glenmark, JB Chemicals, & Cipla.  

“We expect it to remain a dominant therapy for the next 10-15 years and gain 300-400bps share in the same period. Taking into cognizance the importance of this therapy, we deep dive into the Indian cardiac market to identify the potential winners in this space,” said a report authored by Bansi Desai of HDFC Securities.  

Based on our analysis, Lupin, Glenmark, JB Chemicals, & Cipla are likely to gain market share among listed players, and Mankind & USV could gain market share among unlisted players. Top picks are Cipla, Aurobindo & Lupin, added the report.  

HDFC Securities Institutional Research created a framework to identify potential winners based on key parameters that are critical to picking outperformers in this space.  

The key determinants, among others, are a) covered market; b) exposure to high growth molecules; c) ability to build brands (number of Rs50cr+ brands); d) historical performance vs. the IPM. We have equally weighted these parameters to rank these companies 

The WHO estimates that by 2030, CVD would be responsible for more than 35% deaths in India (vs. 25% in 2016) with ischemic heart disease and stroke responsible for >80% of this burden.  

Cardiac has displaced anti-infectives as the leading therapy in India (July 20) and has grown at 10% CAGR over the last four years, outperforming the IPM by 200bps.  

“More importantly, the volume growth has been ~6%, which is double the industry average. While domestic firms dominate this market, the share of MNCs is restricted to less than 13%,” said the report. 

Notwithstanding COVID disruption, the cardiac market grew at 10% YoY vs. 4% decline in IPM from Apr-Aug 20 which is a positive sign for the above-mentioned companies. 

(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)