Indian pharmaceutical companies' future growth is dependent on how soon they venture into the specialty drugs and biosimilars business, according to Morgan Stanley Analyst Sameer Baisiwala.
“Specialty business is a new theme for Indian companies,” Baisiwala told BloombergQuint, adding that companies need to have a pipeline of complex products ready to compete in the U.S. market. “The companies who would reach there first would perform better.”
Baisiwala expects Indian drugmakers to increase their participation in the specialty drugs market in the next few quarters. He also views biologics business as a good opportunity to be in.
Margins, he said, have already come off and from hereon would remain stable and grow going forward.
Real Estate: Pockets Of Opportunity
Real estate companies are more inward looking and thus clearly see the outside challenge in terms of demand, Baisiwala said. “These companies are more frugal about cost and much more savvy about the balance sheet,” he said, adding that their pre-sale targets for financial year 2019-20 forecast reasonable growth.
Baisiwala expects some of the larger companies in the sector to witness a volume growth of 10-20 percent in FY20.
The few pockets of oversupply...are National Capital Region and Mumbai. These pockets of oversupply will continue to be sluggish.Sameer Baisiwala, India Pharma & Property Analyst, Morgan Stanley
Baisiwala expects other metro cities in southern, eastern and northern parts of India to see a low single-digit volume growth in the ongoing year. The prices may also start to inch up to mitigate cost inflation, he said.
Watch the full interview here:
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