Slow growth of Unichem port­fo­lio a con­cern for Tor­rent Pharma

In­dia rev­enue of the phar­ma­ceu­ti­cal firm has re­mained flat over the past three quar­ters

Business Standard - - COMPANIES - SOHINI DAS

Af­ter four quar­ters of con­sol­i­da­tion, Unichem’s busi­ness (which Tor­rent Pharma ac­quired in FY18) has not gained trac­tion. The do­mes­tic fo­cussed pharma ma­jor, how­ever, hopes the port­fo­lio should grow slightly bet­ter than the mar­ket from here on.

An­a­lysts feel that most of the growth levers from Unichem ac­qui­si­tion have been al­ready cap­tured — be it in terms of cost syn­er­gies or per capita per month (sales) im­prove­ment by ra­tio­nal­i­sa­tion of field force.

The In­dia rev­enue of Tor­rent Pharma has re­mained flat over the past three quar­ters — ~830 crore in Q1FY19, ~816 crore in Q2 and ~835 crore in Q3. This as­sumes sig­nif­i­cance as the Ahmed­abad-based pharma ma­jor draws over 40 per cent of its con­sol­i­dated rev­enues from the do­mes­tic mar­ket.

A Tor­rent Pharma spokesper­son ad­mit­ted, “The growth in ac­quired port­fo­lio is lower due to var­i­ous cor­rec­tive ac­tions taken in or­der to align the ac­quired busi­ness prac­tices with Tor­rent prac­tices. Var­i­ous ac­tions have been ex­e­cuted in the ac­quired port­fo­lio to aug­ment de­mand gen­er­a­tion and drive growth through spe­cialty fo­cus. We be­lieve the short term pains will pro­vide a plat­form for look­ing at a healthy growth in com­ing years.” He, how­ever, pointed out at the same time that ac­cord­ing to AIOCD AWACS (the mar­ket re­search firm) Tor­rent port­fo­lio has grown at 15 per cent on De­cem­ber mov­ing an­nual turnover (MAT) ba­sis ver­sus the do­mes­tic pharma mar­ket growth of 9 per cent.

Deepak Ma­lik of Edel­weiss said that Unichem’s do­mes­tic port­fo­lio growth is slow. The fact that Tor­rent has ra­tio­nalised the port­fo­lio, work­force and gen­er­ated syn­er­gies is ev­i­dent from im­prove­ment of Unichem's mar­gin to 30 per cent from sub 20 per cent, he ex­plained.

Q3 num­bers, how­ever, in­di­cate that growth in the ac­quired port­fo­lio will re­main a chal­lenge. The ac­qui­si­tion comes with sig­nif­i­cant over­lap and 20 per cent of the port­fo­lio in­cludes Losar­tan, an anti-hy­per­ten­sion mol­e­cule that is not grow­ing rapidly as the mar­ket has shifted to an­other mol­e­cule Telmis­ar­tan.

Losar­tan, an anti-hy­per­ten­sion drug, in which Unichem en­joyed 37-38 per cent mar­ket share, has hardly seen any growth in the past five years.

The com­pany spokesper­son, how­ever, high­lighted that Losar (a flag­ship brand for Losar­tan) grew 13 per cent in Q3. Over the past one year (as on De­cem­ber MAT over pre­vi­ous year), Losar brand has grown only 4.5 per cent. Tor­rent thinks that Losar­tan is a good fit as it plugs a gap in its an­ti­hy­per­ten­sive port­fo­lio, as it is the pre­ferred drug in the di­uretic hy­per­ten­sive mar­ket, which is 25 per cent of the over­all hy­per­ten­sion mar­ket.

The com­pany said that the top five brands (which con­trib­ute around 50 per cent of the to­tal ac­quired port­fo­lio) have grown by 21 per cent in Q3 com­pared to 14 per cent growth in the car­dio­vas­cu­lar mar­ket. Tor­rent thus ex­pects the growth in the ac­quired port­fo­lio to be bet­ter than mar­ket from here on. “Trend is quite en­cour­ag­ing for other key brands like Am­poxin, Tel­sar, Vizy­lac & Unien­zyme,” the spokesper­son added.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.