It Is Recommended To Remain Focused On Companies with Exposure to Indian Markets
Recently, a report was published by the veteran analysts on pharmaceutical companies that specifically analyses US business margins. The technical analysts informed that there has been a 1,200 bps kind of margin erosion for Indian companies which are serving the US generic markets as a whole. Out of it, it is said that half of the margin erosion has come because of the price pressure. Rest half has come because of the increased R&D activities.
It is recommended to essentially remain focused on companies that have a higher share of EBITDA coming out of India and other markets as compared to US. It is observed that there are still some challenges going forward in terms of pricing pressure continue.
In this regards, the analysts informed to focus on companies like Torrent Pharma and Alkem Labs. These companies still continue to derive a lion share of their EBITDA from this market. The analysts also prefer Biocon as it is a similar story that has nicely played out in the last one to one and a half years.