Dr. Reddy's and Cipla are top picks of Jefferies in Pharma Sector
2020 was the best in recent years with the Pharma index outperforming Nifty by 45%. Jefferies remains positive on India Pharma driven by an average 13% EPS CAGR over FY21-23E. Exporters are set to gain on a stable pricing environment and complex product launches. Jefferies' key concern is the increasing role of price in driving growth in the India market and the emerging threat of e-pharmacies. Jefferies top large-cap picks are Dr. Reddy's and Cipla.
US generics revenues will continue to be driven by stable pricing and complex launches. Global generic players including our coverage have witnessed lower price erosion in the US over the last several quarters: Reuters