Categories
ConferenceCall

Notes from the Reliance Pharma Conference Call

Attended the Reliance Pharma Conference Call where Sailesh Bhan, Fund Manager of Reliance Pharma Fund spoke on the Sector Outlook.

Key takeaways :

  • Pharma Sector consists of two plays-India domestics & US Generic Exports
  • India Domestics consists of India Generics,Diagnostics,Hospitals etc
  • Sees growth in India Domestics as fairly robust…can grow 15% p.a on a value basis
  • GST will impact India Domestics over a 2/3 Quarter Period
  • Doctors prescribing Generic Names vis-a-vis Brands may impact India Domestics but it is too early to tell the exact impact
  • The other category are companies whose sales are 60-65% US Generic market
  • Their sales and earnings have been badly hit due to three reasons
    • Very competitive pricing in US generic markets
    • FDA regulatory issues on their manufacturing plants
    • Lack of new launches due to point # 2
  • It will take at least 18-24 months for earnings to recover for these companies
  • These companies are using their super profits of the past to invest in R&D…some companies have 8-10% of sales invested in R&D
  • Valuations of the Sector have corrected significantly and the market is pricing in zero earnings growth
  • This sector is one of the most competitive sector out of India with exports to more than 100 countries and as such has a lot of promise
  • One may look at this sector from a 2/3 year horizon and do a SIP

2 replies on “Notes from the Reliance Pharma Conference Call”

Yes , some possible dealt in growth could get us restless in these time if great momentum !! Patience and Patients will help investors in the sector !!

Leave a Reply

Your email address will not be published. Required fields are marked *