Pharmaceuticals in India May 2020: Marketline Industry Profile

MarketLine Industry Profile
Pharmaceuticals in India
May 2020
Reference Code: 0102-0372
Publication Date: May 2020
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Industry Profiles
1. Executive Summary
1.1. Market value

The Indian pharmaceuticals market grew by 5.5% in 2019 to reach a value of $32.5 billion.
1.2. Market value forecast

In 2024, the Indian pharmaceuticals market is forecast to have a value of $38.6 billion, an increase of 18.8% since
2019.
1.3. Geography segmentation

India accounts for 10.6% of the Asia-Pacific pharmaceuticals market value.
1.4. Market share

Lupin is the leading player in the Indian pharmaceuticals market, generating a 3.5% share of the market's value.
1.5. Market rivalry

The presence of large scale competitors and smaller generics companies fighting for each drug approval in a lucrative
market ensures rivalry is strong. Strong growth is helping to alleviate the rivalry in the Indian market.
1.6. Competitive Landscape

The Indian pharmaceutical market is dominated by several multinational corporations, alongside smaller firms, such as
biotech players, which are focused on a small number of new products. The presence of large international
incumbents, and the large number of companies operating within the market, has intensified competition in the
market. The Indian market is highly fragmented, with the four leading players accounting for just 8.3% of the market’s
total value.

Industry Profiles
TABLE OF CONTENTS
1. Executive Summary 2
1.1. Market value ................................................................................................................................. 2
1.2. Market value forecast ...................................................................................................................2
1.3. Geography segmentation .............................................................................................................2
1.4. Market share ................................................................................................................................ 2
1.5. Market rivalry ................................................................................................................................ 2
1.6. Competitive Landscape ................................................................................................................2
2. Market Overview 7
2.1. Market definition ........................................................................................................................... 7
2.2. Market analysis ............................................................................................................................ 7
3. Market Data 9
3.1. Market value ................................................................................................................................. 9
4. Market Segmentation 10
4.1. Geography segmentation ...........................................................................................................10
5. Market Outlook 11
5.1. Market value forecast .................................................................................................................11
6. Five Forces Analysis 12
6.1. Summary .................................................................................................................................... 12
6.2. Buyer power ............................................................................................................................... 14
6.3. Supplier power ........................................................................................................................... 16
6.4. New entrants .............................................................................................................................. 17
6.5. Threat of substitutes ...................................................................................................................19
6.6. Degree of rivalry ......................................................................................................................... 20
7. Competitive Landscape 22
7.1. Market share .............................................................................................................................. 22
7.2. Who are the leading players?.....................................................................................................22

Industry Profiles
7.3. What are the strengths/weaknesses of leading players? ...........................................................23
7.4. What strategies do leading players follow? ................................................................................23
7.5. What has been the rationale behind recent M&A activity? .........................................................24
8. Company Profiles 25
8.1. Lupin Ltd..................................................................................................................................... 25
8.2. Sun Pharmaceutical Industries Inc .............................................................................................30
8.3. Aurobindo Pharma Ltd ...............................................................................................................32
8.4. Dr. Reddy's Laboratories Limited ...............................................................................................35
9. Macroeconomic Indicators 40
9.1. Country data ............................................................................................................................... 40
Appendix 42
Methodology............................................................................................................................................ 42
9.2. Industry associations ..................................................................................................................43
9.3. Related MarketLine research .....................................................................................................43
About MarketLine .................................................................................................................................... 45

Industry Profiles
LIST OF TABLES
Table 1: India pharmaceuticals market value: $ billion, 2015–19 9
Table 2: India pharmaceuticals market geography segmentation: $ billion, 2019 10
Table 3: India pharmaceuticals market value forecast: $ billion, 2019–24 11
Table 4: India pharmaceuticals market share: % share, by value, 2019 22
Table 5: Lupin Ltd: key facts 25
Table 6: Lupin Ltd: Annual Financial Ratios 27
Table 7: Lupin Ltd: Key Employees 28
Table 8: Lupin Ltd: Key Employees Continued 29
Table 9: Sun Pharmaceutical Industries Inc: key facts 30
Table 10: Sun Pharmaceutical Industries Inc: Key Employees 31
Table 11: Aurobindo Pharma Ltd: key facts 32
Table 12: Aurobindo Pharma Ltd: Annual Financial Ratios 33
Table 13: Aurobindo Pharma Ltd: Key Employees 34
Table 14: Dr. Reddy's Laboratories Limited: key facts 35
Table 15: Dr. Reddy's Laboratories Limited: Annual Financial Ratios 37
Table 16: Dr. Reddy's Laboratories Limited: Key Employees 38
Table 17: Dr. Reddy's Laboratories Limited: Key Employees Continued 39
Table 18: India size of population (million), 2015–19 40
Table 19: India gdp (constant 2005 prices, $ billion), 2015–19 40
Table 20: India gdp (current prices, $ billion), 2015–19 40
Table 21: India inflation, 2015–19 40
Table 22: India consumer price index (absolute), 2015–19 41
Table 23: India exchange rate, 2015–19 41

Industry Profiles
LIST OF FIGURES
Figure 1: India pharmaceuticals market value: $ billion, 2015–19 9
Figure 2: India pharmaceuticals market geography segmentation: % share, by value, 2019 10
Figure 3: India pharmaceuticals market value forecast: $ billion, 2019–24 11
Figure 4: Forces driving competition in the pharmaceuticals market in India, 2019 12
Figure 5: Drivers of buyer power in the pharmaceuticals market in India, 2019 14
Figure 6: Drivers of supplier power in the pharmaceuticals market in India, 2019 16
Figure 7: Factors influencing the likelihood of new entrants in the pharmaceuticals market in India, 201917
Figure 8: Factors influencing the threat of substitutes in the pharmaceuticals market in India, 2019 19
Figure 9: Drivers of degree of rivalry in the pharmaceuticals market in India, 2019 20
Figure 10: India pharmaceuticals market share: % share, by value, 2019 22

Industry Profiles
2. Market Overview
2.1. Market definition

The pharmaceuticals market consists of ethical drugs only and does not include consumer healthcare or animal
healthcare.
Market values have been calculated at ex-factory prices (the value at which manufacturers sell the drugs to
distributors).
Any currency conversions used in the production of this report have been calculated at constant 2019 annual average
exchange rates.
Figures presented in this report are calculated applying the "middle path" scenario - this is based on the current
situation in countries where the epidemic burst first, like China as a model countries and the announcements made by
governments, stating that the abnormal situation may last up to six months.
The assumption has been made that after this time the economy will gradually go back to the levels recorded before
the pandemics by the end of the year. It is also assumed that there is no widespread economic crisis as seen back in
2008 due to announced pay-outs across countries.
At the moment of preparation of this report in April 2020 the economic implications of the lock downs of many
economics are still very difficult to predict as there is no indication how long the pandemics could last, the number of
sectors forced to stay closed and the scale of the governmental' aid involved. At the same time the weight of the
pandemic seriousness is applied on the individual countries in this report based on death to population ratio recorded
in countries.
Majority of the industries will see the decline in volume of the goods and services offered by companies. Usually the
lower demand would cause the decrease the prices level. However, amid many governments’ ordered for many
industries to lock down and so the supply chain is distorted that in great pictures mitigate the results of lower
demand.
Applied scenarios differ depending on the individual sector, however generally sectors which involves intensive
manual labor and face to face interaction seem to be hit the most by present situation. On the other hand the internet
based businesses as well as the producers of the vital, subsisted products and services seems to take advantages of
the current events.
For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific,
Middle East, South Africa and Nigeria.
North America consists of Canada, Mexico, and the United States.
South America comprises Argentina, Brazil, Chile, Colombia, and Peru.
Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.
Scandinavia comprises Denmark, Finland, Norway, and Sweden.
Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand,
Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.
2.2. Market analysis

Industry Profiles
The Indian pharmaceuticals market declined by 7.4% in 2016, but the market achieved healthy growth rates of around
5% for the remainder of the historic period. The market is expected to decelerate in the forecast period, with
moderate rates expected overall.
The Indian market is growing, driven by an increase in real GDP, doctors and India’s population covered by insurance.
A number of major government initiatives are set to support this growth in the future. In October 2018, the
government announced it will create six pharma science parks and has received more than $712–855m in private
investment for six more. In the 2018–2019 budget, the government announced the National Health Protection
Scheme, the largest government funded healthcare programme in the world. This scheme is expected to benefit 100m
poor families in the country by providing health insurance cover for secondary and tertiary care.
The Indian pharmaceuticals market had total revenues of $32,500.0m in 2019, representing a compound annual
growth rate (CAGR) of 2.2% between 2015 and 2019. In comparison, the South Korean and Chinese markets grew with
CAGRs of 5.2% and 8% respectively, over the same period, to reach respective values of $19,636.6m and $142,557.2m
in 2019.
The Indian market supplies around 40% of generic demand in the US and 25% of all medicine in the UK. Around 80%
of the world’s antiretroviral drugs used in the treatment of HIV/AIDs are made in India. The cost of manufacturing
formulations in India remained 30–40% lower than other comparative manufacturing hubs such as China and Eastern
Europe. India is a major exporter, and although half the revenues of its pharmaceutical market come from exports,
due to their superior profitability compared to domestic products, they contribute much more to net income within
the country.
The government has recently announced plans to consolidate approvals and regulatory practices onto a single ‘portal’,
emphasising its Made in India initiative. Further, it has unveiled its 'Pharma Vision 2020', aimed at making India a
global leader in end-to-end drug manufacture. Additionally, India offers several advantages that make it a preferred
R&D destination for biotechnology research. As of 2019, of all the 3,895 US Food and Drug Administration approved
manufacturing plants outside the US territory, 729 are situated in India, with a global share of 18.72%. Over 300
Indian colleges specialize in bioinformatics and the biological sciences, and produce over 500,000 graduates annually,
highlighting the country’s strengths as a pharmaceutical hub.
Domestic demand for pharmaceutical products is being driven by demographic changes within the country. India has
an aging population. A report released by the United Nations Population Fund and HelpAge India suggests that the
number of elderly persons is expected to grow to 173 million by 2026. Furthermore, there is a rising incidence of
chronic diseases such as diabetes and weight-associated cardiovascular disease as the prevalence of overweight and
obesity has increased rapidly in recent decades. This has and will continue to drive demand for pharmaceutical
products within the country.
The performance of the market is forecast to accelerate, with an anticipated CAGR of 3.5% for the five-year period
2019-2024, which is expected to drive the market to a value of $38,554.5m by the end of 2024. Comparatively, the
South Korean and Chinese markets will grow with CAGRs of 3.9% and 7.7% respectively, over the same period, to
reach respective values of $23,822.0m and $206,279.4m in 2024.
At the time of writing it is difficult to predict how the market will perform in the coming years due to the widespread
outbreak of COVID-19; however, its impact on the Indian pharmaceuticals market is expected to be minimal, with
moderate growth still expected in 2020. Indian manufacturers rely heavily on APIs from China for the production of
their pharmaceuticals, therefore the closure of manufacturing in China has caused supply chain disruptions. This is
expected to lead to a slowdown in growth in 2020. However, pharmaceuticals are a necessity and demand is unlikely
to change much.

Industry Profiles
3. Market Data
3.1. Market value

The Indian pharmaceuticals market grew by 5.5% in 2019 to reach a value of $32.5 billion.
The compound annual growth rate of the market in the period 2015–19 was 2.2%.
Table 1: India pharmaceuticals market value: $ billion, 2015–19
Year $ billion Rs. billion € billion % Growth

2015 29.8 2,097.7 26.6
2016 27.6 1,942.9 24.6 (7.4%)
2017 29.1 2,048.5 26.0 5.4%
2018 30.8 2,168.1 27.5 5.8%
2019 32.5 2,287.8 29.0 5.5%
CAGR: 2015–19 2.2%
SOURCE: MARKETLINE MARKETLINE
Figure 1: India pharmaceuticals market value: $ billion, 2015–19

Industry Profiles
4. Market Segmentation
4.1. Geography segmentation

India accounts for 10.6% of the Asia-Pacific pharmaceuticals market value.
China accounts for a further 46.6% of the Asia-Pacific market.
Table 2: India pharmaceuticals market geography segmentation: $ billion, 2019
Geography 2019 %
China 142.6 46.6
Japan 59.3 19.4
India 32.5 10.6
South Korea 19.6 6.4
Taiwan 2.5 0.8
Rest Of Asia-pacific 49.3 16.1
Total 305.8 99.9%
Figure 2: India pharmaceuticals market geography segmentation: % share, by value, 2019

Industry Profiles
5. Market Outlook
5.1. Market value forecast

In 2024, the Indian pharmaceuticals market is forecast to have a value of $38.6 billion, an increase of 18.8% since
2019.
The compound annual growth rate of the market in the period 2019–24 is predicted to be 3.5%.
Table 3: India pharmaceuticals market value forecast: $ billion, 2019–24
Year $ billion Rs. billion € billion % Growth

2019 32.5 2,287.8 29.0 5.5%
2020 33.5 2,359.3 29.9 3.1%
2021 34.6 2,433.4 30.9 3.1%
2022 36.2 2,547.7 32.3 4.7%
2023 37.4 2,630.7 33.4 3.3%
2024 38.6 2,714.0 34.4 3.2%
CAGR: 2019–24 3.5%
Figure 3: India pharmaceuticals market value forecast: $ billion, 2019–24

Industry Profiles
6. Five Forces Analysis

The pharmaceuticals market will be analyzed taking pharmaceutical manufacturers as players. The key buyers will be
taken as hospitals, pharmacies, health insurance providers and government healthcare programs, and providers of
active pharmaceutical ingredients, appropriate manufacturing/laboratory equipment and clinical trial services as the
key suppliers.
6.1. Summary
Figure 4: Forces driving competition in the pharmaceuticals market in India, 2019
The presence of large scale competitors and smaller generics companies fighting for each drug approval in a lucrative
market ensures rivalry is strong. Strong growth is helping to alleviate the rivalry in the Indian market.
The pharmaceuticals market is characterized by fairly strong buyer power, with the ease of market entry strongly
affected by legal and regulatory frameworks.
India has healthcare insurance offered by the state-owned General Insurance Company (GIC) and its subsidiaries.
Private insurance is also available, although it is currently much less significant than the GIC schemes. However,
neither public nor private health insurance has high penetration in India, with much of the population lacking
coverage and 70% of health spending met by out-of-pocket private spending. There is also a divide between
healthcare provision for the affluent urban classes, and the poorer, rural communities.
Buyer power is strengthened by the oligopsony status and price control policies of state and private sector institutions
that are ultimately the purchasers of drugs. Obtaining high quality materials, equipment, personnel, and third-party
clinical testing services is vital to the business of pharmaceutical companies.
New entrants must satisfy regulators that their products are safe and effective. Non-drug therapies are substitutes for
many pharmaceuticals. In addition, research-based drugs that are no longer protected by patents may be substituted
by cheaper generic copies, with many 'blockbuster' drugs coming off patent in the next few years giving the market a
so-called 'patent-cliff' to negotiate.

Industry Profiles
This risk is, however, mildly reduced, as not all drugs have an effective generic replacement, meaning the original is
able to be sold unhindered by competitors even after the patent ends. In some instances, it is even the original
company that produces the generic in order to try to prevent generic makers from muscling into the market.

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6.2. Buyer power

Figure 5: Drivers of buyer power in the pharmaceuticals market in India, 2019
Pharmaceutical manufacturers may sell to drug wholesalers, which then sell on to pharmacies, or to healthcare
institutions such as hospitals. Developing markets such as India are becoming increasingly important for
manufacturers given the pricing pressures being applied in mature economies. Some of the largest buyers in the
Indian market include India’s national health insurance, Rashtriya Swasthya Bima Yojana (RSBY) and Fortis Healthcare,
which have strong financial muscle and purchase large quantities of drugs. Some independent pharmacies exist but
these often operate on a small scale and supply isolated communities.
Except for OTC and similar drugs, prescriptions are generally required in order to obtain pharmaceutical products.
Marketing of prescription drugs by their manufacturers is therefore largely directed at medical practitioners, with
whom they wield a significant influence. In fact, with the notable exception of the US, advertising such products
directly to consumers is usually illegal.
Depending on the medical condition, there may be several different drug treatments available and product
differentiation in these cases weakens buyer power. Such differentiation can include efficacy, ease of use, side effects,
and cost-effectiveness. The move towards genetic and genomic research, giving rise to the possibility of personalized
medicine, is also likely to decrease buyer power. Conversely, where generic equivalents to a branded drug exist,
differentiation is decreased and buyer power enhanced.
The primary source of funds for drug purchases is, in some cases, a public or private-sector health insurer or similar
body. These may fund purchases directly or they may reimburse some or all of an end-user’s initial purchase. This
increases buyer power. Not only can such large purchasers exert monopsony market power, but also it is very
common for them to use one or more specific price control strategies. The majority of funding in India, however,
comes from private out-of-pocket expenditure.
Governments may simply set drug prices directly, in which case it becomes illegal to sell at a different price. Where
governments are responsible for the reimbursement of consumers, they may set a very low reimbursement price for
new or existing drugs on the market.
India has healthcare insurance offered by the state-owned General Insurance Company (GIC) and its subsidiaries.
Private insurance is also available, although it is currently much less significant than the GIC schemes. However,
neither public nor private health insurance has high penetration in India, with much of the population lacking
coverage and 70% of health spending met by out-of-pocket private spending. There is also a divide between
healthcare provision for the affluent urban classes, and the poorer, rural communities.

Industry Profiles
Reference price regimes, in which reimbursement levels are set, by comparison of the price of a drug in peer group
countries and/or therapeutic categories, are common. Where a therapeutic category contains generics, the effect may
be to push down the reference price for on-patent drugs in the same category. A similar effect can occur where peer
group countries have lower per capita incomes than the country making the comparison.
Price-volume or profit controls may exist. These set a limit to the volume of a drug which may be sold in the country,
or to the amount of profit a drug company can make, beyond which manufacturers must offer either compensatory
payments to the government or price reductions.
Such systems may be regarded as market distortions. However, where they are in force, it is because policy makers
consider that the social benefits of lower-cost drugs, such as improved access to healthcare, outweigh the social
harms, such as a potential reduction in pharmaceutical companies’ ability to invest in R&D.
The Indian government's National Pharmaceutical Pricing Authority exerts control over the price of a list of so-called
‘scheduled’ drugs. It also monitors price trends for other pharmaceuticals, and imposes a limit of 10% on annual price
increases. In February 2018, the Indian government announced it will be introducing major changes to the current
Drug Pricing Control Order (DPCO), which will be replaced with a new pharma policy to implement the National Health
Protection Scheme or ‘Namocare’ across the country. Namocare will be aimed at benefiting 10 crore poor families by
providing coverage of up to Rs5 lakh per family each year for secondary and tertiary healthcare. Buyer power has
increased in recent years due to rising healthcare costs and the increasing availability of generics.
Overall, buyer power is assessed as strong."

Industry Profiles
6.3. Supplier power

Figure 6: Drivers of supplier power in the pharmaceuticals market in India, 2019
Major suppliers to the pharmaceuticals market are manufacturers of active pharmaceutical ingredients (APIs), which
form a sub-sector of the chemical industry and produce key inputs such as disintegrants, glidants and diluents.
A number of leading pharmaceutical companies have major investments in fine chemical manufacturing, providing
them with a degree of self-sufficiency and this reduces supplier power to an extent. APIs are supplied on a contractual
basis and so pharmaceutical companies are likely to risk high switching costs if they consider taking their business
elsewhere. In turn, pharmaceutical companies employ sourcing managers to minimize costs and to mitigate supplier
power. The development of new therapeutic agents requires the sourcing of newer APIs, for which chemical
manufacturers can charge pharmaceutical companies higher prices. If the novel drug successfully reaches the market,
the supplier of the API can make a large amount of money.
Market players tend to purchase their raw materials from numerous suppliers, reducing their reliance on any
particular company. In general, laboratory equipment and chemicals show little differentiation between suppliers,
with customers utilizing a high degree of choice in order to obtain the best quality and cost relationship, reducing
supplier power. However, there are instances where specialized facilities or raw materials are required, such as the
sterile processing of biological materials. In such cases, supplier power is much stronger. It is unlikely that suppliers
would forward-integrate into the pharmaceuticals market; however, their capabilities in chemical synthesis make
them ideal candidates for forward integration into the manufacture of generic drugs. Over recent years, larger
pharmaceutical companies have turned to producing their own chemicals in a bid to enhance profits; however,
smaller companies lack the resources required to do this and remain reliant on API manufacturers.
It is common for pharmaceutical companies to outsource their drug testing and clinical trials to third-party test service
providers. Given the importance of these trials for regulatory approvals, these service providers are also important
suppliers.
Overall, supplier power is moderate.

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6.4. New entrants

Figure 7: Factors influencing the likelihood of new entrants in the pharmaceuticals market in India, 2019
Regulation and legal frameworks can affect the ease of market entry in several ways.
Firstly, a company wishing to market its products must demonstrate that its drugs are safe and effective, to the
satisfaction of the national regulator. In India, this role is played by the Drug Standard Control Organization (CDSCO).
Companies must adhere to stringent manufacturing practice and quality control standards with the production of
generics. Historically, this regulation has been more lax than in many other countries, with one 2014 study finding
10% of pharmaceuticals studied to be of poor quality, and a Europe-wide ban on generics from Indian company GVK
Biosciences coming into effect in mid-2015.
A start-up company that intends to develop an entirely new biotech drug will need significant up-front investment,
often from venture capital companies, and this must be available for the time it takes to develop and test the product.
Meeting these regulatory requirements is time-consuming; it can take 10 to 15 years to bring a drug to market.
According to the Pharmaceutical Research and Manufacturers of America (PhRMA), out of 5,000 to 10,000 screened
compounds, only 250 enter preclinical testing, of which only five enter human clinical trials, and finally just one will be
approved. In addition to investing a significant amount in research and development, manufacturers also expend
substantial costs on marketing, which further increases the capital required by new entrants.
On the other hand, entering a specific country market with an existing drug is likely to be easier, provided the
licensing authority there is satisfied.
A further regulatory barrier to entry is the use of restrictive formularies: for a specific therapeutic category, only
certain drugs may be listed as preferred. This does not mean that non-formulary alternatives are unsafe or ineffective.
Rather, they can only be prescribed in special circumstances with prior approval from the relevant authority, or with
more substantial co-pays from the patient. The potential market for non-formulary drugs will therefore be smaller
than the size of the therapeutic class market might imply.
Due to the relatively low manufacturing costs of small molecules, patent protection is the major barrier to entry for
new entrants into the market. The intensity of competition can result in significant legal action around the time a
major drug reaches the end of its patent life, particularly for ‘blockbuster’ drugs that sell more than $1bn a year.
Secondary patents covering new alterations in the drug formulation, dosing regimens, or methods of administration,
are usually pursued, prompting litigation between major pharmaceutical and generics companies. Indeed, it is usually
worthwhile for a manufacturer to spend millions in legal fees in order to delay the launch of a new generic product by
a number of weeks, due to the profitability of major blockbuster drugs.

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The nature and strength of intellectual property protection is dependent on the specific market; however, compliance
with international IP legislation is improving in the developing markets, particularly where these markets are shifting
to knowledge-led economies.
New entrants will also have to recruit specialists in the field, in order to develop and produce innovative medications.
Researchers often have a bachelor’s degree in chemistry or a related field, potential employees with qualifications of
this nature often command higher salaries, which could prove to be a barrier for new entrants.
Increased regulatory scrutiny from authorities and consolidation in the supply chain to the US has resulted in greater
research and development expenses, along with other price pressures. Several existing players are now targeting
specialty drugs and complex therapies, showing the Indian market is undergoing significant development in terms of
sophistication. Increasing prosperity among the general population and greater demand for improving healthcare will
attract new entrants seeking new markets. For foreign companies, increasingly stringent controls, which are closer to
standards common in more developed markets, could make India a more enticing prospect because the risk of brand
damaging scandals is reduced. The number of drug approvals in the US for drugs made in India increases
attractiveness to new entrants.
Current market players, with whom new entrants must compete, are well-established companies who benefit from
scale economies. These include leading generic companies such as SunPharma and Lupin, as well as domestic
company Aurobindo. Barriers to entry for a generics company will depend on factors such as the expiry of patents on
those drugs it intends to replicate, and the likelihood that the patent holder will protect its market position by offering
a similar drug under a new or extended patent. Also, laws defending intellectual property vary from country to
country. In some, patent law may be undeveloped. In others, governments may explicitly prioritize public health
needs over private intellectual property rights. India did not allow drugs to be patented until 2005 (in line with WTO
requirements), and currently only grants patents to completely new drugs rather than improvements to existing
products.
Overall, whilst the barriers to market entry are relatively high, strong market growth means that the threat of new
entrants is weak.

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6.5. Threat of substitutes

Figure 8: Factors influencing the threat of substitutes in the pharmaceuticals market in India, 2019
There are several substitutes for pharmaceuticals considered in this report. Patients may choose traditional remedies.
Physicians may opt for non-drug treatments if they consider them more appropriate. Successful drugs coming off
patent also allow buyers to purchase generic drugs.
Switching costs for patients here are relatively low. However, they may be more significant for the ultimate buyers,
the healthcare providers. For example, suppose a national healthcare system reviewed the clinical evidence and
decided that a chronic condition that had been treated by drugs taken for the patient’s lifetime could actually be
treated by a simple surgical procedure. This would be a beneficial and cheap alternative. However, it might require
more surgical teams to be trained and more operating theatres made available, which the healthcare system would
also need to fund. These would constitute switching costs.
The main substitutes to branded drugs are generics and biosimilars (also known as follow-on biologics).
Manufacturers of generics can offer the same drug at a much lower price, as they rely on the safety and efficacy data
provided by the innovator product, and they therefore do not have to conduct costly clinical trials.
In April 2017, the Indian Supreme Court upheld a ruling which stated that Swiss pharmaceutical company Novartis
should not receive a patent for its leukemia drug Gleevec. Many hope the ruling will prevent pharmaceutical
companies from seeking patents on HIV drugs and other medicines. However, some observers fear any further free
trade agreements could unwind progress made towards greater protection for generic drugs.
The threat of substitutes is assessed as strong.

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6.6. Degree of rivalry

Figure 9: Drivers of degree of rivalry in the pharmaceuticals market in India, 2019
The Indian research-based pharmaceuticals market is dominated by several large corporations, alongside smaller firms
such as biotech players focused on a small number of new products; generics companies are also present. The
presence of large incumbents, as well as the number of companies operating within the market, increases the level of
rivalry. The leading players in the market include Aurobindo, Lupin, Dr Reddys Labs and Sun Pharmaceutical Industries
Limited.
Rivalry in the Indian market is alleviated somewhat by the strong rate of growth and importance as an exporting
nation of pharmaceuticals. Aurobindo Pharma was recently granted final approval from the US health regulator to
manufacture abacavir sulfate and lamivudine tablets, used in the treatment of HIV. Success as an export nation and
growing consumption of healthcare services has produced a growing market in which companies can expand without
resorting to mergers and acquisitions. Aurobindo, a leading company in India, has produced rapid growth in profits
and revenues during recent years. However, the market is fragmented compared to more developed countries and
consolidation will serve to increase rivalry.
Large companies often lose revenue due to the expiration of patents and are increasingly motivated to acquire
smaller companies that have a strong revenue potential due to innovative products. Therefore, acquisitions are
common in this particular market and are a key way for companies to establish a competitive edge.
The practical benefit is reducing overall costs by increasing specialization, therefore eliminating research in less
profitable areas. The downside is the possibility that drugs will be produced by fewer companies, decreasing the
chance of major breakthroughs.
However, market concentration overall is not very high. There may be a greater effective concentration within specific
therapy areas, and this is a market where products can be highly differentiated through their clinical effectiveness. For
example, one company may have a patented drug which is highly effective in treating a particular condition. It would
be difficult to compete directly with such a player, although other companies will no doubt be managing development
pipelines in order to exploit this market when the drug comes off patent.
Research-based pharmaceutical companies are similar to media companies, in that they rely on initially creating
valuable intellectual property at a high cost, which can then be used to create mass-produced products at relatively
low cost. The ability of generics companies to be profitable while selling the same molecule at a much lower price
than the originator, following patent expiration, shows that establishing high-quality manufacturing processes is not
prohibitively costly. A secondary effect of this is that it is relatively easy for research-based companies to expand

Industry Profiles
output, for example through licensing agreements with other companies, without the need to scale up their own
production facilities. Given the increasing linkages between regulatory authorities and the greater likelihood of a drug
being approved in multiple locations, this tends to boost rivalry.
It is moderately easy to exit the market. Many of the assets are ‘weightless’ – patents, trademarks, synthetic methods,
and so on – and can be sold relatively easily. Many of the R&D and production facilities and equipment have uses
outside pharmaceutical research or manufacture.
Overall, the degree of rivalry is strong.

Industry Profiles
7. Competitive Landscape
The Indian pharmaceutical market is dominated by several multinational corporations, alongside smaller firms, such as
biotech players, which are focused on a small number of new products. The presence of large international
incumbents, and the large number of companies operating within the market, has intensified competition in the
market. The Indian market is highly fragmented, with the four leading players accounting for just 8.3% of the market’s
total value.
7.1. Market share
Table 4: India pharmaceuticals market share: % share, by value, 2019
Company % Share
Lupin 3.5%
Sun Pharmaceutical Industries Limited 3.5%
Dr Reddys Labs 0.9%
Aurobindo 0.4%
Other 91.7%
Total 100%
Figure 10: India pharmaceuticals market share: % share, by value, 2019
7.2. Who are the leading players?

Industry Profiles
Lupin Ltd (Lupin) develops and manufactures generic and branded formulations, biotechnology products and active
pharmaceutical ingredients (APIs). It is one of the leading players in India, with a market share of 3.5%. The company
has expertise in the areas of cardiovascular, asthma, diabetology, pediatrics, central nervous system, gastro-intestinal,
anti-infectives, nonsteroidal anti-inflammatory drugs (NSAIDs), anti-TB and cephalosporins.
Sun Pharmaceutical Industries Ltd (Sun Pharma) is a specialty pharmaceutical company that offers a wide range of
pharmaceutical formulations such as branded generics and generic pharmaceuticals. It also has a market share of
3.5%. The company’s products find application in the treatment of various conditions related to psychiatry, neurology,
cardiology, nephrology, gastroenterology, orthopedics and ophthalmology.
Dr. Reddy's Laboratories (DRL) is an integrated pharmaceutical company that offers generics, over the counter, active
pharmaceutical ingredients and proprietary products. The generics products are ready for consumption by the
customer product and specified for the areas of gastrointestinal, cardiovascular, pain management, oncology, anti-
infectives, pediatrics and central nervous system. DRL has a market share of 0.9%.
Aurobindo Pharma Ltd (Aurobindo) is a vertically integrated pharmaceutical company that manufactures and markets
generic pharmaceuticals and active pharmaceutical ingredients (APIs). Its product portfolio is spread across major
therapeutic and product categories including antibiotics, anti-retroviral, systemic gastroenterological, central nervous
system (CNS), cardiovascular, anti-allergies, anti-diabetics, other therapeutic areas. It is the smallest of the four
leading players, with a market share of 0.4%.
7.3. What are the strengths/weaknesses of leading players?

Dr. Reddy's has a robust operational base consisting of manufacturing facilities, research and development centers,
and presence in various regions to cater to the needs of patients in an effective and efficient manner. The company
has a presence in North America, India, Europe, Russia, Venezuela, CIS countries and Germany. Dr. Reddy’s owns and
operates several manufacturing facilities including nine API manufacturing facilities, of which six are the US Food and
Drug Administration (USFDA) approved plants in India, and one FDA- approved plant each in Cuernavaca, Mexico;
West Yorkshire, the UK; and New York, the US; ten formulation plants in India, and one each in the US, the UK, and
China; and one Biologics center in Hyderabad, India. The company also has four technology development centers (two
in India, and two in the UK), one integrated product development facility in India, and two R&D centers in India, and
one R&D center in Malaysia. These facilities support and enhance the company’s ability to manage complex generic
pharmaceutical projects starting from API manufacturing, development, marketing and distribution. Dr. Reddy’s
positions itself as a vertically integrated company providing a diverse range of pharmaceuticals covering various
aspects of the value chain. Vertical integration provides several advantages to each of the company’s divisions such as
reduced manufacturing and delivery times, lower costs, direct sourcing of raw materials and quality control. This
strong operational base enables the company to maintain an edge over its competitors.
A strong portfolio of generic products enables Lupin to serve diversified end-markets that hold attractive long-term
growth characteristics. The company offers its products for various therapeutic areas including cardiovascular (CVS),
asthma, diabetes, gastro intestinal (GI), central nervous system (CNS) infectious diseases and gynecology. The
company’s product portfolio also includes branded formulations and APIs. Some of its leading products include
Rifampicin, Pyrazinamide and Ethambutol, as well as products in cephalosporins including cefaclor, cephalexin and
their Intermediates. The company is among the market leaders in fast growing and expanding chronic therapies in the
areas of CNS, cardiology, diabetology, anti-infective, gastro intestinal, anti-asthma and oncology.
7.4. What strategies do leading players follow?

Heavy investment in R&D is a crucial strategy for players in the market, in order to bring innovative new products to
market and to generate a strong patent portfolio. Lupin conducts research to develop programs on the discovery of
new biosimilars in the areas of pain, inflammation, metabolic and endocrine diseases, auto immune diseases, central
nervous system disorders, oncology and infectious diseases. Its advanced drug delivery platforms enable the company
to produce value added generic and branded pharmaceuticals. In FY2019, Lupin’s expenditure on R&D amounted to

Industry Profiles
INR15,730.9 million ($2.2 billion), which as a percentage of revenue amounted to 9.4%. Lupin operates research
facilities in the Netherlands, Mexico, Brazil; Japan; and in the US.
7.5. What has been the rationale behind recent M&A activity?
Sun Pharma has implemented strategic inorganic initiatives, which will enhance its business operations in the long
term. The company acquired an additional 11.86% stake in Biosintez in March 2019. With this additional stake, Sun
Pharma increased its stake in Biosintez to 96.9%. Biosintez manufactures and markets pharmaceuticals including,
injections, blood preservatives, ampoules, blood substitutes, ointment, creams, tablets, suppositories, gels, and APIs
among others, for hospital segment. Biosintez recorded revenue of RUB2,373 million in 2018. Sun Pharma believes
that the acquisition will enhance its market share in Russia and improve its profitability. The company acquired Pola
Pharma in January 2019. The acquisition is likely to reinforce Sun Pharma’s presence in dermatology segment across
the world. Pola Pharma conducts R&D, manufacture, distribution, and sale of generics and branded pharmaceuticals
in Japan. It operates two manufacturing facilities in Saitama with capabilities to produce topical injectables and
products.

Industry Profiles
8. Company Profiles
8.1. Lupin Ltd
8.1.1. Company Overview
Lupin Ltd (Lupin) develops and manufactures generic and branded formulations, biotechnology products and active
pharmaceutical ingredients (APIs). The company has expertise in the areas of cardiovascular, asthma, diabetology,
pediatrics, central nervous system, gastro-intestinal, anti-infectives, nonsteroidal anti-inflammatory drugs (NSAIDs),
anti-TB and cephalosporins. It undertakes extensive research and development of pharmaceuticals for treatment of
migraine, gastrointestinal, psoriasis, central nervous system, cardiovascular, tuberculosis, diabetes and inflammation.
Lupin develops value-added generic pharmaceuticals based on its platform technologies. The company along with its
subsidiaries has manufacturing facilities in India, the US, Japan, Mexico and Brazil. Lupin is headquartered in Mumbai,
Maharashtra, India.
The company reported revenues of (Rupee) INR167,181.8 million for the fiscal year ended March 2019 (FY2019), an
increase of 5.8% over FY2018. In FY2019, the company’s operating margin was 8.8%, compared to an operating
margin of 3.8% in FY2018. In FY2019, the company recorded a net margin of 3.6%, compared to a net margin of 1.6%
in FY2018. The company reported revenues of INR44,183.8 million for the first quarter ended June 2019, an increase
of 0.3% over the previous quarter.
8.1.2. Key Facts
Table 5: Lupin Ltd: key facts
Head office: B/4 Laxmi Towers Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra, India
Number of Employees: 17042
Website: www.lupin.com
Financial year-end: March
Ticker: LUPIN
Stock exchange: National Stock Exchange of India
SOURCE: COMPANY WEBSITE MARKETLINE
8.1.3. Business Description
Lupin Ltd (Lupin) undertakes the manufacture and marketing of generic and branded pharmaceutical products, and
active pharmaceutical ingredients (APIs). The company offers these drugs in various formulations such as solid, semi-
solid and liquid. It is one of the leading and fasting growing companies. Its product portfolio is focused on various
therapeutic areas such as cardiovascular, diabetics, asthma, pediatrics, central nervous system, gastro intestinal,
tuberculosis, infections and non-steroidal anti inflammatory drugs.
The company’s operations are limited to one segment, namely, Pharmaceuticals.
Lupin’s business includes formulations, active pharmaceutical ingredients (APIs), generic formulations, and
biotechnology products. The company’s global formulations business develops and delivers a broad range of branded
and generic formulations, biotechnology products and APIs worldwide. Lupin specializes in the diabetology,
cardiovascular, pediatric, asthma, gastrointestinal, central nervous system (CNS) therapeutics, anti-infectives, anti-TB
and nonsteroidal anti-inflammatory drugs (NSAID) space. Principal markets of formulations business include India, the

Industry Profiles
US, Japan, Europe, South Africa, Philippines, and Australia. The business operates 18 manufacturing facilities
worldwide.
Its APIs products include antibiotics for cephalosporin and non systemic gastro-intestinal; Anti-B; cardiovascular
products including anti-hypertensive, anti-hyperlipidemic and anti-thrombotic, for CNS including anti-convulsant, anti-
Parkinson and neuropathic pain agent; as well as for analgesics and anti-gout.
The company's biotechnology (biotech) division focuses on manufacturing high quality biologics and biosmilars. It has
a pipeline of ten biosimilars in various stages of clinical development.
Lupin commercialized oncology products: Lupifil and Lupifil-P, biosimilars for molecules Filgrastim and Peg-Filgrastim
in India four years ago. It is developing biosimilar for Etanercept under the brand Enbrel.
Lupin’s advanced drug delivery systems business has developed various platforms including, bio-adhesive / gastro-
retentive extended release systems, laser-drilled extended release systems, bioavailability enhancement systems
based on solubilization and nano-particle technology, matrix or reservoir based release systems, and taste masking
technologies for solid and liquid orals.
The company operates manufacturing facilities in India, Japan, the US, Brazil and Mexico. It sells its products to over
100 countries in the US, the UK, Europe, Germany, India, Japan, South Africa, Philippines, and Australia through a
network of international subsidiaries and a Joint Venture in Japan.
Geographically, the company generates its revenue from four regions, namely, India, the US, Japan and other.

Industry Profiles
Table 6: Lupin Ltd: Annual Financial Ratios
Key Ratios 2015 2016 2017 2018 2019

Growth Ratios
Sales Growth % 13.14 11.63 22.72 -9.66 5.78
Operating Income Growth % 18.24 -2.43 11.01 -83.36 146.19
EBITDA Growth % 22.35 -0.75 21.00 -62.60 51.83
Net Income Growth % 30.87 -5.93 13.12 -90.18 141.40
EPS Growth % 27.79 -6.44 13.87 -63.63 -20.41
Working Capital Growth % 25.06 11.19 20.85 21.97 8.57
Equity Ratios
EPS (Earnings per Share) INR 53.20 49.93 56.46 5.54 13.36
Dividend per Share INR 7.50 7.50 7.50 5.00 5.00
Dividend Cover Absolute 7.09 6.66 7.53 1.11 2.67
Book Value per Share INR 204.08 247.75 298.90 300.32 303.70
Profitability Ratios
Gross Margin % 64.59 66.26 67.97 63.63 62.33
Operating Margin % 25.94 22.68 20.51 3.78 8.80
Net Profit Margin % 18.82 15.86 14.62 1.59 3.63
Profit Markup % 182.42 196.43 212.22 174.93 165.47
PBT Margin (Profit Before Tax) % 26.74 23.35 20.25 3.46 9.07
Return on Equity % 26.20 20.25 18.95 1.85 4.41
Return on Capital Employed % 33.81 18.40 17.52 2.82 6.74
Return on Assets % 20.48 12.60 10.39 0.95 2.24
Return on Working Capital % 76.32 66.98 61.53 8.40 19.04
Operating Costs (% of Sales) % 74.06 77.32 79.49 96.22 91.20
Administration Costs (% of Sales) % 35.24 39.32 41.41 42.92 44.12
Liquidity Ratios
Current Ratio Absolute 2.25 1.95 1.95 2.40 2.26
Quick Ratio Absolute 1.51 1.28 1.34 1.66 1.62
Cash Ratio Absolute 0.61 0.16 0.46 0.32 0.50
Leverage Ratios
Debt to Equity Ratio Absolute 0.02 0.49 0.42 0.49 0.50
Net Debt to Equity Absolute 0.01 0.57 0.54 0.42 0.58
Debt to Capital Ratio Absolute 0.02 0.33 0.30 0.33 0.33
Efficiency Ratios
Asset Turnover Absolute 1.09 0.79 0.71 0.60 0.62
Fixed Asset Turnover Absolute 4.23 3.81 3.61 2.82 2.84
Inventory Turnover Absolute 1.90 1.60 1.56 1.53 1.64
Current Asset Turnover Absolute 1.84 1.61 1.60 1.31 1.28
Capital Employed Turnover Absolute 1.30 0.81 0.85 0.75 0.77
Working Capital Turnover Absolute 2.94 2.95 3.00 2.22 2.16
SOURCE: COMPANY FILINGS MARKETLINE

Industry Profiles
Table 7: Lupin Ltd: Key Employees
Name Job Title Board

Alok Ghosh President Technical Operations Senior Management
Alok Sonig Chief Executive Officer US Generics Senior Management
Alok Sonig Global Head - Generics R&D & Biosimilars Senior Management
Christine Mundkur Director Non Executive Board
Cyrus Karkaria President Biotechnology Senior Management
President Global Sourcing and Contract
Debabrata Chakravorty Senior Management
Manufacturing
Dileep C. Choksi Director Non Executive Board
Fabrice Egros President Asia Pacific and Japan Senior Management
J. Alan Butcher Chief Corporate Development Officer Senior Management
Jean-Luc Belingard Director Non Executive Board
Jon Stelzmiller President Specialty, US Business Senior Management
K. U. Mada Director Non Executive Board
Kamal K. Sharma Vice Chairman Non Executive Board
Kurt Nielsen President - Somerset, USA Senior Management
Manju D Gupta Chairman Executive Board
Manju. D. Gupta Executive Director Non Executive Board
Martin Mercer President Latin America Senior Management
Naresh Gupta President API and Global TB Senior Management
Nilesh Gupta Director Executive Board
Nilesh Gupta Managing Director Executive Board
President - Kyowa Pharmaceutical Industry
Noriaki Tsunoda Senior Management
Co., Ltd., Japan
Paul McGarty President Lupin Pharmaceuticals Inc Senior Management
Pooja Thakran Head Corporate Communications Senior Management
R. A. Shah Director Non Executive Board
R.V. Satam Secretary Senior Management
Rajeev Sibal President India Region Formulations Senior Management
President Novel Drug Discovery and
Rajender Kamboj Senior Management
Development
President Global Supply Chain and
Rajendra Chunodkar Senior Management
Technology
Ramesh Swaminathan Chief Financial Officer Executive Board
Ramesh Swaminathan Director Executive Board

Industry Profiles
Table 8: Lupin Ltd: Key Employees Continued

Richard Zahn Director Non Executive Board
President Head Pipeline Management and
Sofia Mumtaz Senior Management
Legal
Sreeji Gopinathan Chief Information Officer Senior Management
Sunil Makharia Chief Financial Officer Interim Senior Management
Sunil Makharia President Finance Senior Management
Thierry Volle President Europe, Middle East and Africa Senior Management
Vinita Gupta Chief Executive Officer Executive Board
Vinita Gupta Director Executive Board
Yashwant Mahadik President Global HR Senior Management
Yugesh Goutam President Global Human Resources Senior Management

Industry Profiles
8.2. Sun Pharmaceutical Industries Inc
Sun Pharmaceutical Industries Inc (Sun Pharma), a subsidiary of Sun Pharmaceutical Industries Ltd, is a healthcare
products provider that manufactures pharmaceuticals products. The company offers generics, branded generics, over
the counter (OTC), and prescription products. Its generic products include allopurinol, albuterol USP, bromocriptine
mesylate USP, calcitriol, clopidogrel USP, desloratadine, doxycycline hyclate, fenofibrate, imatinab, valsartan,
zonisamide, and others. Sun Pharma’s OTC products comprise cholesterol control, vitamins and minerals supplement,
olesan oil, and nasal decongestant. The company serves therapeutic areas of neurology, cardiology, anti-infectives,
ophthalmology, gynaecology, respiratory, oncology, nephrology, diabetology, gastroenterology, and nutritionals. It
operates in Israel and Hungary. Sun Pharma is headquartered in Cranbury, New Jersey, the US.
8.2.2. Key Facts
Table 9: Sun Pharmaceutical Industries Inc: key facts
Head office: 1 Commerce Drive Cranbury, New Jersey, United States

Website: www.sunpharma.com/usa
Financial year-end: April

Industry Profiles
Table 10: Sun Pharmaceutical Industries Inc: Key Employees

Ashwin Dani Director Non Executive Board
Dilip Shanghvi Director Executive Board
Dilip Shanghvi Managing Director Executive Board
Gautam Doshi Director Non Executive Board
Israel Makov Chairman Executive Board
Kalyanasundaram Subramanian Director Non Executive Board
Keki M. Mistry Director Non Executive Board
Rekha Sethi Director Non Executive Board
S. Mohanchand Dadha Director Non Executive Board
Sailesh T. Desai Director Executive Board
Sudhir V. Valia Director Executive Board
Vivek Chaand Sehgal Director Non Executive Board

Industry Profiles
8.3. Aurobindo Pharma Ltd
Aurobindo Pharma Ltd (Aurobindo) is a vertically integrated pharmaceutical company that manufactures and markets
generic pharmaceuticals and active pharmaceutical ingredients (APIs). Its product portfolio is spread across major
therapeutic and product categories including antibiotics, anti-retroviral, systemic gastroenterological, central nervous
system (CNS), cardiovascular, anti-allergies, anti-diabetics, other therapeutic areas. The company also produces novel
proprietary biocatalysts, dietary supplements and fermentation based semi synthetic products. Aurobindo operates
manufacturing facilities in India, the US, Brazil and Portugal; and R&D facilities in India and the US. The company
exports products to several countries worldwide. Aurobindo is headquartered in Hyderabad, Telangana, India.
The company reported revenues of (Rupee) INR195,635.5 million for the fiscal year ended March 2019 (FY2019), an
margin of 19.7% in FY2018. In FY2019, the company recorded a net margin of 12.1%, compared to a net margin of
14.7% in FY2018. The company reported revenues of INR54,446 million for the first quarter ended June 2019, an
increase of 2.9% over the previous quarter.
8.3.2. Key Facts
Table 11: Aurobindo Pharma Ltd: key facts
Plot No. 11 Survey No. 9, Water Mark Building, Kondapur, Hitech City, Hyderabad,
Head office:
Telangana, India
Website: www.aurobindo.com
Ticker: AUROPHARMA
Aurobindo Pharma Ltd (Aurobindo) is a global pharmaceutical company that produces generic formulations and active
pharmaceutical ingredients (APIs). The company’s product portfolio is spread over seven key therapeutic areas,
including antibiotics, antiretrovirals (ARVs), cardiovascular, central nervous systems (CNS), anti-diabetics,
gastroenterologicals and antiallergics. It offers a broad portfolio of diversified dosage forms, including prescription
and OTC oral solids and liquids, specialty products ophthalmics, injectables and controlled substances.
Aurobindo manufactures and sells generic formulations in the US, Europe and growth markets. It principally develops
oral and injectable generic formulations. The company also provides customer centric project-based chemistry
services and stability study activities through AuroSource; novel slutions from discovery to development and
commercialization to cost-effective drug development and manufacturing through Auro Peptides Ltd; and biocatalysts
for use in the Pharmaceutical and Chemical Industries through AuroZymes.
- Markets products and solutions in more than 150 countries.
- Manufactured more than 26 billion diverse dosage forms in FY2018
- It has several manufacturing facilities for APIs-oral and sterile, drug intermediates and formulations. Operates 21
manufacturing facilities in India, three manufacturing facilities in the US and one each in Brazil and Portugal; and R&D
facilities in India and USA

Industry Profiles
Table 12: Aurobindo Pharma Ltd: Annual Financial Ratios
Key Ratios 2015 2016 2017 2018 2019

Growth Ratios
Sales Growth % 49.64 15.14 8.13 9.34 18.57
Operating Income Growth % 24.67 22.92 7.83 7.51 -0.97
EBITDA Growth % 22.01 22.29 7.97 10.36 2.06
Net Income Growth % 34.35 28.51 13.66 5.28 -2.41
EPS Growth % 34.85 27.70 13.51 5.48 0.47
Working Capital Growth % 62.84 6.80 5.97 35.06 -5.43
Equity Ratios
Gross Margin % 49.53 50.09 51.73 54.95 51.19
Profit Markup % 98.13 100.34 107.15 121.99 104.86
Return on Equity % 29.26 27.79 24.56 20.75 17.02
Return on Assets % 14.13 14.10 14.31 12.98 9.95
Liquidity Ratios
Leverage Ratios
Efficiency Ratios

Industry Profiles
Table 13: Aurobindo Pharma Ltd: Key Employees

Adi Reddy Secretary Senior Management
Ashok Kumar Saxena Senior Vice President Operations Senior Management
Avnit Bimal Singh Director Non Executive Board
D Surya Narayana Vice President Process Development Senior Management
G Bhaskar Reddy Vice President Operations Senior Management
I.V.S.S. Prasad Vice President Operations Senior Management
K Nithyananda Reddy Vice Chairman Executive Board
K. Nityananda Reddy Director Non Executive Board
K. Nityananda Reddy Vice Chairman Non Executive Board
K. Ragunathan Director Non Executive Board
M Madan Mohan Reddy Director Non Executive Board
M Sitarama Murthy Director Non Executive Board
M Sivakumaran Director Non Executive Board
Makkapati Satakarni President Biologics Senior Management
Medisetti V Rama Krishna Vice President Operations Senior Management
N Govindarajan Managing Director Executive Board
P Sarath Chandra Reddy Director Non Executive Board
P V Ramaprasad Reddy Director Non Executive Board
P V Ramprasad Reddy Director Non Executive Board
S Vijaya Kumar President Technical Senior Management
Sanjeev Indravadan Dani Chief Operating Officer Senior Management
Sanjeev Indravadan Dani Head Formulations Senior Management
Santhanam Subramanian Chief Financial Officer Senior Management
Satnam Singh Loomba Senior Vice President Operations Senior Management
Savita Mahajan Director Non Executive Board
Sudhanshu Radhakrishna Kamat Vice President Business Development Senior Management
Sudhir B Singh Head Global Finance Operations Senior Management
V K.Handa President Chemical Research Senior Management

Industry Profiles
8.4. Dr. Reddy's Laboratories Limited
Dr. Reddy's Laboratories (DRL or 'the company') is an integrated pharmaceutical company that offers generics, over
the counter, active pharmaceutical ingredients and proprietary products. The generics products are ready for
consumption by the customer product and specified for the areas of gastrointestinal, cardiovascular, pain
management, oncology, anti-infectives, pediatrics and central nervous system. It also offers pharmaceutical services
and active ingredients product that consists of active pharmaceutical products or bulk drugs. DRL is engaged in the
discovery of new chemical entities for the areas of metabolic disorders, pain and inflammation. The company
operates in India, North America, Europe, Russia and other countries of the former Soviet Union. DRL is
headquartered in Hyderabad,Telengana, India.
The company reported revenues of (Rupee) INR154,482 million for the fiscal year ended March 2019 (FY2019), an
margin of 8.9% in FY2018. In FY2019, the company recorded a net margin of 12.6%, compared to a net margin of 6.6%
in FY2018. The company reported revenues of INR38,582 million for the first quarter ended June 2019, a decrease of
4.3% over the previous quarter.
8.4.2. Key Facts
Table 14: Dr. Reddy's Laboratories Limited: key facts
Head office: 8-2-337Road No.3 Banjara Hills, Hyderabad, Telangana, India

Website: www.drreddys.com
Ticker: DRREDDY
Dr. Reddy's Laboratories (DRL or 'the company') is a pharmaceutical company engaged in manufacturing generics,
active pharmaceutical ingredients (APIs), and proprietary products. It primarily operates in India, North America,
Europe, Russia and other countries of the former Soviet Union.
The company operates through four segments: global generics; pharmaceutical services and active ingredients (PSAI);
proprietary products; and other.
DRL's global generics segment consists of finished pharmaceutical products that are ready for consumption by the
patient. These products are marketed under a brand name (branded formulations) or as generic finished dosages with
therapeutic equivalence to branded formulations (generics).The branded generics portfolio offers products in the
therapeutic areas of gastrointestinal, cardiovascular, pain management, oncology, anti-infectives, pediatrics and
central nervous system under the brand names of Omez, Ciprolet, Nise, Ketorol, Stamlo, Razo and Cetrine in India,
Russia, Venezuela, Romania, South Africa and certain countries of the former Soviet Union. The segment is also
engaged in over-the-counter (OTC) drug products business. DRL's biologics business is also a part of the company's
global generics segment. In FY2019, the global generics segment reported the revenue of INR122,903 million, which
accounted for 79.9% of company’s total revenue.
The PSAI segment consists of the company's APIs and intermediates, also known as active pharmaceutical products or
bulk drugs, which are the principal ingredients for finished pharmaceutical products. This segment also manufactures

Industry Profiles
and sells APIs and steroids in accordance with the specific customer requirements. In addition, the PSAI segment
offers contract research services. In FY2019, the PSAI segment reported the revenue of INR24,140 million, which
accounted for 15.7% of company’s total revenue.
The company's proprietary products is engaged in the discovery of new chemical entities (NCEs) and differentiated
formulations for subsequent commercialization and out-licensing. It also includes the company's specialty
pharmaceuticals business which sells and markets in-licensed and co-developed dermatology products. The NCE's
therapeutic areas of focus include metabolic disorders, pain and inflammation. In FY2019, the proprietary products
segment reported the revenue of INR4,750 million, which accounted for 3.1% of company’s total revenue.
The Other segment includes the operations of company’s wholly-owned subsidiary, Aurigene Discovery Technologies
Limited. The subsidiary is a discovery stage biotechnology company that develops therapies for oncology and
inflammation and works with established pharmaceutical and biotechnology companies. In FY2019, the other
segment reported the revenue of INR2,058 million, which accounted for 1.3% of company’s total revenue.
Geographically, the company classifies its operation into four countries including the US, India, Russia and Others. In
FY2019, the company generated 45% of revenue from the US, followed by India (18.7%), Russia (9.9%) and other
(26.3%).

Industry Profiles
Table 15: Dr. Reddy's Laboratories Limited: Annual Financial Ratios
Key Ratios 2015 2016 2017 2018 2019

Growth Ratios
Sales Growth % 3.63 -8.81 0.60 8.17
Operating Income Growth % 11.73 -52.69 -12.30 60.39
EBITDA Growth % 14.03 -38.02 -5.17 35.17
Net Income Growth % -8.81 -39.36 -26.72 105.96
EPS Growth % -12.54 -35.20 -20.37 72.80
Working Capital Growth % 0.20 -76.80 185.22 44.62
Equity Ratios
Gross Margin % 70.70 71.33 70.36 68.35 67.77
Profit Markup % 241.24 248.78 237.34 215.93 210.23
Return on Equity % 21.57 16.95 10.54 7.53 13.91
Return on Assets % 24.51 10.80 6.12 4.27 8.66
Liquidity Ratios
Leverage Ratios
Efficiency Ratios

Industry Profiles
Table 16: Dr. Reddy's Laboratories Limited: Key Employees

Prasad R Menon Director Non Executive Board
Allan Grant Oberman Director Additional Non Executive Board
Alok Sonig Executive Vice President Senior Management
Alok Sonig Head North America Generics Senior Management
Executive Vice President Integrated Product
Amit Biswas Senior Management
Development Organization (IPDO)
Anil Namboodiripad Head Promius Pharma Senior Management
Anil Namboodiripad Senior Vice President Proprietary Products Senior Management
Ashok Ganguly Director Non Executive Board
Bharat Narotam Doshi Director Non Executive Board
Bruce LA Carter Director Non Executive Board
Cartikeya Reddy Executive Vice President Biologics Senior Management
Chandrasekhar Sripada Head HR Senior Management
Chandrasekhar Sripada President Senior Management
Erez Israeli Chief Operating Officer Senior Management
Erez Israeli Head Generics and PSAI Senior Management
G V Prasad Chief Executive Officer Executive Board
G V Prasad Co-Chairman Executive Board
G V Prasad Managing Director Executive Board
Ganadhish Kamat Executive Vice President Senior Management
Ganadhish Kamat Head Global Quality Organization Senior Management
Executive Vice President Management
J. Ramachandran Senior Management
Systems and Corporate Initiatives
Kalpana Morparia Director Non Executive Board
KVS Ram Rao Head PSAI Commercial Organization Senior Management
KVS Ram Rao Senior Vice President Senior Management
Leo Puri Director Non Executive Board
M V Ramana Executive Vice President Senior Management
Head Branded Markets (India and Emerging
M V Ramana Senior Management
countries)
Chief Executive Officer North America
Marc Kikuchi Senior Management
Generics
Executive Vice President, Proprietary
Raghav Chari Senior Management
Products
Samiran Das Executive Vice President Senior Management

Industry Profiles
Table 17: Dr. Reddy's Laboratories Limited: Key Employees Continued

Samiran Das Head Global Manufacturing Operations Senior Management
Satish Reddy Chairman Executive Board
Saumen Chakraborty Chief Financial Officer Senior Management
Saumen Chakraborty Head ITandBPE Senior Management
Saumen Chakraborty President Senior Management
Shikha Sanjaya Sharma Director Non Executive Board
Sridar Iyengar Director Non Executive Board

Industry Profiles
9. Macroeconomic Indicators
9.1. Country data
Table 18: India size of population (million), 2015–19
Year Population (million) % Growth

2015 1,254.0 1.2%
2016 1,269.0 1.2%
2017 1,283.6 1.2%
2018 1,298.0 1.1%
2019 1,312.2 1.1%
Table 19: India gdp (constant 2005 prices, $ billion), 2015–19
Year Constant 2005 Prices, $ billion % Growth

2015 1,716.1 7.6%
2016 1,847.6 7.7%
2017 1,990.6 7.7%
2018 2,146.3 7.8%
2019 2,315.9 7.9%
Table 20: India gdp (current prices, $ billion), 2015–19
Year Current Prices, $ billion % Growth

2015 2,337.2 14.3%
2016 2,671.5 14.3%
2017 3,035.3 13.6%
2018 3,453.7 13.8%
2019 3,932.6 13.9%
Table 21: India inflation, 2015–19

Industry Profiles
Year Inflation Rate (%)

2015 7.2%
2016 6.7%
2017 6.4%
2018 6.3%
2019 6.3%
Table 22: India consumer price index (absolute), 2015–19
Year Consumer Price Index (2005 = 100)

2015 231.0
2016 246.5
2017 262.2
2018 278.7
2019 296.3
Table 23: India exchange rate, 2015–19
Year Exchange rate ($/Rs.) Exchange rate (€/Rs.)

2015 64.1233 71.1453
2016 67.1794 74.3472
2017 65.0484 73.5945
2018 68.4090 80.6918
2019 70.3943 78.8440

Industry Profiles
Appendix
Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-
checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by
analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases
provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company
profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market
overview
Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of
each definition are carefully reviewed at the start of the research process to ensure they match the requirements of
both the market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and
trends
MarketLine aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data
to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which
can then be refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

Industry Profiles
9.2. Industry associations
9.2.1. International Federation of Pharmaceutical Manufacturers & Associations (IFPMA)
15 Ch. Louis-Dunant, PO Box 195, 1211 Geneva 20, CHE

Tel.: 41 22 338 3200
Fax: 41 22 338 3299
www.ifpma.org
9.2.2. Generic Pharmaceutical Association (GPhA)
777 Sixth Street, NW, Suite 510 Washington, DC 20001, USA

Tel.: 1 202 249 7100
www.gphaonline.org
9.2.3. European Federation of Pharmaceutical Industries and Associations (EFPIA)
Leopold Plaza Building, Rue du Trône 108, B-1050 Brussels, BEL

Tel.: 32 02 626 25 55
Fax: 32 02 626 25 66
www.efpia.org
9.2.4. Organisation of Pharmaceutical Producers of India (OPPI)
Peninsula Chambers, Ground Floor, Ganpatrao Kadam Marq, Lower Parcel, Mumbai 400 013, IND
Tel.: 91 22 249 18123
Fax: 91 22 249 15168
www.indiaoppi.com
9.3. Related MarketLine research
9.3.1. Industry Profile
Generics in Europe
Global Pharmaceuticals
Pharmaceuticals in the United States
Pharmaceuticals in Asia-Pacific

Industry Profiles

Industry Profiles
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Pharmaceuticals in India May 2020: Marketline Industry Profile

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MarketLine Industry Profile

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Publication Date: May 2020

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 1

1.1. Market value

1.2. Market value forecast

1.3. Geography segmentation

1.4. Market share

1.5. Market rivalry

1.6. Competitive Landscape

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 2

1.1. Market value ................................................................................................................................. 2

1.2. Market value forecast ...................................................................................................................2

1.3. Geography segmentation .............................................................................................................2

1.4. Market share ................................................................................................................................ 2

1.5. Market rivalry ................................................................................................................................ 2

1.6. Competitive Landscape ................................................................................................................2

2.1. Market definition ........................................................................................................................... 7

2.2. Market analysis ............................................................................................................................ 7

3.1. Market value ................................................................................................................................. 9

4.1. Geography segmentation ...........................................................................................................10

5.1. Market value forecast .................................................................................................................11

6. Five Forces Analysis 12

6.1. Summary .................................................................................................................................... 12

6.2. Buyer power ............................................................................................................................... 14

6.3. Supplier power ........................................................................................................................... 16

6.4. New entrants .............................................................................................................................. 17

6.5. Threat of substitutes ...................................................................................................................19

6.6. Degree of rivalry ......................................................................................................................... 20

7.1. Market share .............................................................................................................................. 22

7.2. Who are the leading players?.....................................................................................................22

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 3

7.3. What are the strengths/weaknesses of leading players? ...........................................................23

7.4. What strategies do leading players follow? ................................................................................23

8.1. Lupin Ltd..................................................................................................................................... 25

8.2. Sun Pharmaceutical Industries Inc .............................................................................................30

8.3. Aurobindo Pharma Ltd ...............................................................................................................32

8.4. Dr. Reddy's Laboratories Limited ...............................................................................................35

9.1. Country data ............................................................................................................................... 40

9.2. Industry associations ..................................................................................................................43

9.3. Related MarketLine research .....................................................................................................43

About MarketLine .................................................................................................................................... 45

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 4

Table 2: India pharmaceuticals market geography segmentation: $ billion, 2019 10

Table 3: India pharmaceuticals market value forecast: $ billion, 2019–24 11

Table 4: India pharmaceuticals market share: % share, by value, 2019 22

Table 5: Lupin Ltd: key facts 25

Table 6: Lupin Ltd: Annual Financial Ratios 27

Table 7: Lupin Ltd: Key Employees 28

Table 8: Lupin Ltd: Key Employees Continued 29

Table 9: Sun Pharmaceutical Industries Inc: key facts 30

Table 10: Sun Pharmaceutical Industries Inc: Key Employees 31

Table 11: Aurobindo Pharma Ltd: key facts 32

Table 12: Aurobindo Pharma Ltd: Annual Financial Ratios 33

Table 13: Aurobindo Pharma Ltd: Key Employees 34

Table 14: Dr. Reddy's Laboratories Limited: key facts 35

Table 15: Dr. Reddy's Laboratories Limited: Annual Financial Ratios 37

Table 16: Dr. Reddy's Laboratories Limited: Key Employees 38

Table 17: Dr. Reddy's Laboratories Limited: Key Employees Continued 39

Table 18: India size of population (million), 2015–19 40

Table 19: India gdp (constant 2005 prices, $ billion), 2015–19 40

Table 20: India gdp (current prices, $ billion), 2015–19 40

Table 21: India inflation, 2015–19 40