Pharma Players To Counter US Tariff Pain? THIS D-Street Expert Has A Plan: 'Diversify Away From...'
Amit Varma, Managing Partner, Quadria Capital believes that despite the short-term US tariff-sword, the outlook for India's pharma sector is positive.
The Indian diagnostic services market currently is worth Rs. 774 billion with the expansion expected to hit nearly Rs 1,200 billion by FY28. Industry experts believe some of the key growth drivers for the diagnostic sector are an increased focus on preventive diseases and wellness.
Early intervention is the second growth factor, which involves screening, early detection, and monitoring reduce downstream healthcare costs. Evidence-based treatment is also important due to the rise in demand for evidence-based medical treatments. Finally, lifestyle diseases, which are growing the demand for services related to the diseases.
In the current scenario, Amit Varma, Managing Partner of Quadria Capital told NDTV Profit in an exclusive interview that India's pharmaceutical and diagnostics sector is poised for long-term growth despite the short-term pain from US tariffs. Varma is bullish on CDMOs and CDMROs and also has a positive stance on Indian hospitals and diagnostic players.
How will India's drug players withstand US tariff pain?
According to Varma, there is a lot of buzz around innovation-driven models and many Indian companies are investing in innovation, complex generics, and specialty drugs, while also taking a hard look for a rapid adoption on cutting-edge therapy. "All this are good indications of how things are moving forward for the diagnostic and pharma sector," said Varma.
He added that there is a widespread digitisation which is now being used in manufacturing for Indian pharma sector. "Government-led policies such as PLI and Make-In-India are also helping the pharma sector maintain its growth trajectory," he said.
Coming to the impact of US tariffs on India's pharmaceutical industry, the market expert believes that despite the short-term pain, the outlook for the sector is positive. "As India remains a global leader in generic drugs and vaccines, are we looking at diversifying from the US to the rest of world," said Varma on his 'plan' to counter the impact of tariffs.
"Despite the short-term US tariff-sword hanging over our heads, the outlook is positive. It augers well for the Indian pharma players to use this as an opportunity to diversify away from US. Having said that, tariffs will cause a massive disruption in the supply chain," Varma claimed.
He added that the tariff rate will eventually be a 'political decision' of who's going to hurt more, India or US, as the world's largest economy will still buy drugs from India. He claims that the impact will cause a 'short term pain' for everybody.
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D-Street expert bullish on CDMOs, hospitals
Varma remains bullish on CDMOs and CDMROs with his second bet being for specialised APIs. "Thirdly, while India continues to be a global leader in generic drugs, there's a rapidly expanding portfolio that we can build in biologics and specialty drugs," he told NDTV Profit. He also stays positive on hospitals and diagnostic players.
Varma's Quadria Capital was founded in 2012 and is an independent healthcare-focused private equity firm with over US$4 billion AUM. The company invests in leading healthcare businesses across Asia.
Healthcare delivery, life sciences, medical technology, and associated healthcare services are the key focus sectors for Quadria Capital. The portfolio includes Aragen life sciences, NephroPlus, Maxivision Eye Hospitals, Straits Orthopaedics, Medibuddy, Encube Ethicals, Nobel hygiene, and Con Cung.
