Monthly Update

October 8, 2013
Sector View Overweight Index Performance as on September 30, 2013
Return (%) Return (%) BSE 500 Sensex BSE Healthcare I-Direct Healthcare 1M 5 4 6 9 3M -2 0 7 8 YTD -7 0 16 23 12M -3 3 26 33

Health Check
Poor IPM growth fails to arrest buying interest…
Domestic formulations growth crashed to a five-year low at 1.1% YoY for August 2013. As the implementation process for the new DPCO 2013 is still in progress, distributors/retailers continued to keep inventory channels dry. A sharp reduction in margins for both retailers and wholesalers also caused the slump. Therapies, which witnessed de-growth during the month were anti-infectives (1%), cardiac (4%), vitamins (1%) and respiratory (3%). Key chronic therapies like anti-diabetic and neurology posted single digit growth of 6% and 5%, respectively. In a first of its kind, Cadila Healthcare launched the first NCE in India when it introduced Lipaglyn, a novel drug for treating Diabetic Dyslipidemia and Hypertriglyceridemia in Type II diabetes, not controlled by statins alone. The drug has been approved for launch in India by the Drug Controller General of India (DGCI). Lipaglyn offers a novel action that offers lipid and glucose lowering effects in one molecule and is the first Glitazar to be approved anywhere in the world. The product provides patients suffering from diabetic dyslipidemia the option of a once-daily oral therapy and has beneficial effects on both lipid parameters as well as glycemic control. Ranbaxy again found itself in the dock when the USFDA slapped an import alert on Ranbaxy’s new Mohali facility for not complying with manufacturing standards. The USFDA also advised that the Mohali facility will be subject to certain terms of the consent decree signed in January 2012. The USFDA had conducted inspections at Ranbaxy’s Mohali facility in 2012, resulting in certain observations. Another company Strides also found itself at the wrong end when the USFDA issued a warning letter to the Agila Specialties’ sterile manufacturing facility (SFF2) at Bangalore. In July 2013, the USFDA had inspected the facility and found a deviation in good manufacturing practices followed by the company in this facility. Mylan has said on record that the development will not have impact on the proposed acquisition of Agila. Bowing to the resistance of local retailers/wholesalers, companies such as Cipla, Torrent and Indoco among others have decided to increase trade margins to 10% to stockists and 20% to retailers on the price-controlled basket of drugs, as against the earlier offered 8% and 16%, respectively. Finally, the Supreme Court, at the behest of the All India Drug Action Network (AIDAN) an NGO, will evaluate the new National Pharmaceutical Pricing Policy-2012 for fixing prices of essential medicines in the country and also the Drugs (Prices Control) Order, 2013 (DPCO 2013), notified by the government in May. Observing that the Centre is being guided by marketdriven forces, the Supreme Court sought a comparative analysis including the impact of the new policy on the ceiling prices of drugs. Buying continues on account of better Q2 expectations Contrary to our expectation of underperformance on the back of flat IPM growth and profit booking, the BSEHC managed to outperform the broader indices backed by sustained buying in heavyweights such as Sun, Lupin, Cipla and Doctor Reddy’s. This, we believe, was on account of better earnings expectations in Q2 driven by US exports. We expect the trend to continue for some time driven by ‘defensive’ buying.

Stocks Performance
Return (%) Company Sun Pharma.Inds. Dr Reddy's Labs Lupin Cipla Glaxosmit Pharma Glenmark Pharma. Ranbaxy Labs. Cadila Health. Apollo Hospitals Divi's Lab. Ipca Labs. Torrent Pharma. Biocon Aurobindo Pharma Wockhardt Strides Arcolab Pfizer Natco Pharma Unichem Labs. Jubilant Life Elder Pharma Indoco Remedies Opto Circuits 1M 14 4 8 4 5 3 -19 4 8 -2 15 8 -4 11 12 -1 4 5 16 11 12 4 -15 3M 17 7 10 10 6 -3 7 -12 -12 -2 9 7 20 12 -48 -1 0 38 2 -39 3 2 2 -9 YTD 61 30 40 4 14 1 -34 -25 18 -12 38 21 18 7 -67 -21 -9 33 -30 -64 -16 2 -81 -55 12M 45 44 14 25 26 -38 -22 27 -10 48 26 23 43 -59 -2 -13 68 -14 -62 13 -6 -84 -46 Mcap 30-Sep 40503 38342 34725 20904 14389 13976 13916 12933 12881 9028 7415 6754 5892 5746 5091 3240 1924 1523 1274 692 601 498 420 71 122884

Dishman Pharma. 21 Mcap: Market cap in | crore;

Price movement
10000 9000 8000 7000 6000 Sep-12 Dec-12 Mar-13 Jun-13 Sensex (RHS) BSE Healthcare 21000 19000 17000 15000 Sep-13

Analyst’s name
Siddhant Khandekar siddhant.khandekar@icicisecurities.com Krishna Kiran Konduri krishna.konduri@icicisecurities.com

ICICI Securities Ltd. | Retail Equity Research

Regulatory approvals Exhibit 1: Summary of USFDA approvals
Company Dr Reddy's Dr Reddy's Dr Reddy's Glenmark Glenmark Lupin Lupin Lupin Sun Pharma Sun Pharma Company Cadila Healthcare
[5

Drug Name Vinorelbine Tartrate Injection Azacitidine injection Esomeprazole Magnesium; Naproxen Dr tablets Desoximetasone Ointment Hydrocortisone Butyrate Cream Topiramate tablets Zolpidem Tartrate ER tablets Ethinyl Estradiol; Norethindrone tablets Levetiracetam ER Tablets Lansoprazole DR capsules Drug Name Sirolimus tablets

Final Approvals Therapeutic Area Anti-Cancer Anti-Cancer Anti-inflammatory Dermatology Dermatology CNS Insomnia Oral Contraceptive Anti-epileptic Anti-Ulcerent Tentative Approvals Therapeutic Area Immunosuppressant

Innovator company Pierre Fabre Celgene AstraZeneca Taro Triax Pharma Ortho-McNeil Sanofi Aventis Warner Chilcot UCB Inc Novartis Innovator company Pfizer

Generic Version of Navelbine Vidaza Vimovo Topicort Locoid Topamax Ambien Ovcon Keppra XR Prevacid Generic Version of Rapamune

Market Size NA US$ 380 million US$ 25 million US$ 50 million US$ 34 million NA US$ 366million US$ 22 million US$ 1.2 billion US$ 430 million Market Size US$ 200 million

CNS: Central Nervous System; CVS: Cardiovascular, NA: Not available;; Source: USFDA ICICIdirect.com Research

Exhibit 2: UK MHRA approval for September 2013
Company Strides Arcolab Strides Arcolab Glenmark Dr Reddy's Drug Gemcitabine solution for infusion Eptifibatide solution for injection Gemcitabine solution for infusion Docetaxel solution for infusion Therapeutic Area Anti-Cancer Anti-Cancer Anti-Cancer Anti-Cancer Innovator company Eli Lilly Merck Eli Lilly Sanofi Generic Version of Gemzar Integrilin Gemzar Taxotere

Source: UKMHRA, ICICIdirect.com Research

Regulatory Filings/ Approvals

Strides receives USFDA approval for Italian facility Strides has received USFDA approval for a facility in Milan, Italy. This facility manufactures liquids, semi-solids, ointments and creams. The company is expecting its first approval by Q1 2014. The company expects its first semisolid product to be commercialised by the first quarter of next year. Mylan – Strides deal gets US, India nods Mylan Inc has won the US antitrust approval to buy Agila, a unit of Strides Arcolab, subject to divesting some products as per the directions of the US Federal Trade Commission (FTC). The Union Cabinet has already approved the deal on September 3. The companies will have to divest assets needed to make 11 generic injectable drugs as a condition for approving the deal, the FTC said.
IP issues/court rulings

Dr Reddy’s Labs gets unfavourable verdict from US Appeals Court The United States Court of Appeals for the Federal Circuit has ruled against Dr Reddy’s Labs (DRL) pertaining to a patent litigation for alleged infringement of Sunovion Pharmaceuticals’ blockbuster drug Lunesta, which is used for the treatment of insomnia. The latest order sets aside an earlier ruling issued by a New Jersey Court, which ruled in favour of DRL. According to the Federal Circuit Court, the lower court has erred in granting the summary judgement of noninfringement by DRL.

ICICI Securities Ltd. | Retail Equity Research

Page 2

M&As, Demergers and tie-ups

Sun forms JV with US based Intrexon to develop eye therapies Sun and US-based Intrexon Corp are set to form a joint venture to develop gene-based therapies to treat eye diseases that cause partial or total blindness. The two companies will share the investments in the project and also the revenues generated from it. Intrexon will share its full suite of proprietary synthetic biology technologies, including the RheoSwitch Therapeutic System or RTS platform, a method for controlling the location, concentration and timing of protein expression, through exclusive channel collaboration.
Product launches

Cadila launches NCE Lipaglyn across India Cadila Healthcare has launched Lipaglyn, a novel drug for treating Diabetic Dyslipidemia and Hypertriglyceridemia in Type II diabetes, not controlled by statins alone. The drug has been approved for launch in India by the Drug Controller General of India (DGCI). Lipaglyn offers a novel action that offers lipid and glucose lowering effects in one molecule and is the first Glitazar to be approved anywhere in the world. The product provides patients suffering from diabetic dyslipidemia the option of a once-daily oral therapy and has beneficial effects on both lipid parameters as well as glycemic control. Lipaglyn will be available across India and can be prescribed by cardiologists, diabetologists and general physicians. The cost will be | 25.90 per tablet.
Withdrawals/ product recalls/warning letters

Ranbaxy receives import alert for Mohali facility The USFDA has slapped an import alert on Ranbaxy’s new Mohali facility for not complying with manufacturing standards. The USFDA has also advised that the Mohali facility will be subject to certain terms of the consent decree signed in January 2012. The USFDA had conducted inspections at Ranbaxy’s Mohali facility in 2012, resulting in certain observations. Unconfirmed reports suggest the company has filed ~18 ANDAs from the same facility. Strides receives warning letter for Agila Bangalore facility The USFDA has issued a warning letter to the Agila Specialties’ sterile manufacturing facility (SFF2) at Bangalore. Agila Specialties is a wholly owned subsidiary of Strides Arcolab. Earlier in July 2013, USFDA had inspected the facility and found a deviation in good manufacturing practices followed by the company in this facility. This resulted in an issue of Form 483 to the company. The facility contributes around 25% of Agila’s sales or 14% of consolidated sales. Mylan has said on record that the development will not have impact on the proposed acquisition of Agila. Torrent recalls drug from US for defective packaging The USFDA has asked Torrent Pharmaceuticals to recall a batch of Olanzapine tablets of 10 mg - citing defects in its packaging. The drug is used to treat schizophrenia and bipolar disorders. Only one lot of bottles, containing 30 tablets each is affected. The drug in question was to expire only in September 2014.

ICICI Securities Ltd. | Retail Equity Research

Page 3

Deals & Alliances

Glenmark, Forest Labs enters into collaboration for drug development Glenmark has received a small research fee payment from Forest Laboratories on collaboration for the development of novel mPGES-1 inhibitors to treat chronic inflammatory conditions to support the next phase of work. Forest has an exclusive option to obtain license rights to the programme upon completion of pre-clinical trials. Under the terms of the agreement, Forest has made US$6 million upfront payment to Glenmark and also made an additional US$3 million to support the next phase of work for the development of novel mPGES-1 inhibitors to treat chronic inflammatory conditions, including pain. Lupin ties up with US company for Derma brand Lupin has signed a strategic co-promotion agreement with US based Onset Dermatologics, LLC which grants Lupin exclusive rights to promote Onset's Locoid Lotion (hydrocortisone butyrate 0.1%) to paediatricians in the US. Locoid Lotion is a corticosteroid indicated for the topical treatment of mild to moderate atopic dermatitis in patients three months of age and older. Atopic Dermatitis (AD) is one of the most common skin disorders in young children in the US and has a prevalence of 10-20% in the first decade of life.
Others

Companies bow down to pressure tactics of retailers/stockists Companies like Cipla, Torrent and Indoco among others have decided to increase trade margins to 10% to stockists and 20% to retailers on the price-controlled basket of drugs, as against the earlier offered 8% and 16%, respectively. Companies like Torrent are offering a 5% special discount on these medicines to stockists. Since the implementation of the new pharma policy the trade margin has become a major issue as stockists are resorting to reduction in their drug orders leading to scarcity of widely-prescribed medication like painkillers, anti-infectives, cardiac and antibiotics. As per DPCO 2013, the retailers’ margin for all scheduled (controlled category) products is 16% on price, inclusive of excise duty. Earlier, this was on MRP excluding VAT and excise duty. The stockist margin on controlled products was 8% excluding excise duty. The new price control order has reduced net margins for retailers and wholesalers. Supreme Court to evaluate new pricing policy The Supreme Court has said it will evaluate the new National Pharmaceutical Pricing Policy-2012 for fixing prices of essential medicines in India and also the Drugs (Prices Control) Order, 2013 (DPCO 2013), notified by the government in May. Observing that the Centre is being guided by market-driven forces, the Supreme Court sought a chart from All India Drug Action Network (AIDAN), an NGO, and giving comparative analysis including the impact of the new policy on the ceiling prices of drugs. AIDAN in its new application had sought quashing of both the 2012 policy and DPCO 2013, which would reduce prices of 348 essential medicines, notified by the Department of Pharmaceuticals. AIDAN told the court that the new policy, which puts a ceiling on drug prices based on average market prices, would lead to a higher cap than the earlier one and the new policy will lead to super profits for pharma companies.

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Page 4

Exhibit 3: Patent Litigations in CY13 so far
Month Jan-13 Jan-13 Jan-13 Feb-13 Feb-13 Feb-13 Feb-13 Mar-13 Mar-13 Mar-13 Mar-13 Apr-13 Apr-13 Apr-13 May-13 May-13 Jun-13 Jun-13 Jun-13 Jun-13 Jun-13 Jun-13 Jun-13 Jun-13 Jun-13 Jul-13 Jul-13 Jul-13 Jul-13 Jul-13 Jul-13 Aug-13 Aug-13
[5

Innovator Pfizer & Warner-Lambert Co Hoffman-La Roche & Genentech, AstraZeneca; KBI-E & Pozen Novartis Novartis Novartis Novartis Mallinckrodt & Novo Research Pfizer & Pharmacia & Upjohn Intendis & Bayer G.D. Searle & Pfizer Purdue Pharma Helsinn Healthcare & Roche Acura Pharma Senju Pharma & Allergan Fresenius Kabi USA LLC Pfizer AbbVie Inc Novartis Janssen Producs MSD & BMS UCB Alpex Pharma Pfizer & UCB Pfizer & UCB UCB UCB UCB UCB UCB Alcon Pharma Pfizer & UCB AstraZeneca

ANDA Filer Wockhardt Aurobindo Pharma Dr. Reddy's Labs Dr. Reddy's Labs Agila, Strides Arcolab Sun Pharma Wockhardt Taro Pharma Lupin Glenmark Pharma Lupin Dr Reddy's Labs Aurobindo Pharma Ranbaxy labs Agila, Strides Arcolab Dr Reddy's Labs Dr Reddy's Labs Dr Reddy's Labs Sun Pharma Lupin Cipla Cadila Healthcare Cadila Healthcare Lupin Cadila Healthcare Sun Pharma Ranbaxy labs Glenmark Pharma Aurobindo Pharma Alembic Pharma Lupin Wockhardt Wockhardt

Brand Name Lyrica Boniva Vimovo Reclast Reclast Reclast Reclast Pennsaid Detrol La Finacea Celebrex Intermezzo Aloxi Oxecta Zymaxid Diprivan Pristiq Zemplar Gleevec Prezista Sustiva Vimpat Suprenza Toviaz Toviaz Vimpat Vimpat Vimpat Vimpat Vimpat Moxeza Toviaz Nexium

API Pregabalin Biphosphonic Acid Naproxen/Esomeprazole Magnesium Zolendronic Acid Zolendronic Acid Zolendronic Acid Zolendronic Acid Diclofenac Tolterodine Tartrate Azelaic Acid Benzenesulfonamide Zolpidem Tartrate Palonosetron Hydrochloride oxycodone hydrochloride Gatifloxacin Propofol Desvenlafaxine Paracalcitol Imatinib mesylate Darunavir Efavirenz Lacosamide Phentermine Fesoterodine Fesoterodine Lacosamide Lacosamide Lacosamide Lacosamide Lacosamide Moxifloxacin hydrochloride Fesoterodine Esomeprazole

Used for Anti-Seizure Osteoporosis Osteoporosis Osteoporosis Osteoporosis Osteoporosis Osteoporosis Osteoporosis Anti-Muscarinic Dermatology Anti-Inflammatory Insomnia Nausea and vomiting Pain Anti-bacterial Anti-epilepticus Anti-Depression Anti-thyroid Leukemia Anti-Retroviral Anti-Retroviral Epilepsy Weight Loss Overactive bladder Overactive bladder Epilepsy Epilepsy Epilepsy Epilepsy Epilepsy Bacterial conjunctivitis Overactive bladder Heartburn

Source: Bloomberg, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 5

Therapy wise performance (| crore)
Therapy Aug '13 Aug '12 YoY (%) Anti-Infectives 1154 1167 -1 Gastro Intestinal 746 718 4 Cardiac 729 757 -4 Vitamins 560 565 -1 Pain 484 456 6 Respiratory 458 474 -3 Anti Diabetic 428 403 6 Gynaecological 389 390 0 Neuro 382 365 5 Derma 351 332 6 Ophthal 115 109 6 Hormones 103 107 -4 Others 95 84 14 Anti-Neoplastics 88 74 19 Blood Related 75 75 0 Vaccines 69 77 -11 Anti Malarials 68 78 -12 Sex Stimulants 33 32 4 Stomatologicals 28 28 3 Source: AIOCD database Jul'13 QoQ (%) 1171 -1 762 -2 777 -6 579 -3 473 2 478 -4 407 5 404 -4 388 -1 350 0 119 -3 104 -1 87 10 87 1 79 -5 67 2 67 2 34 -3 30 -5

Domestic Health Check
IPM growth slowest in almost five years…
The domestic formulations industry witnessed muted growth of 1.1% YoY in August 2013, which was probably the lowest in the last five years. The muted growth was followed by 9.4% YoY growth in July 2013. The industry continued to suffer as distributors/retailers were unwilling to take inventory into channel due to uncertainty over new DPCO 2013 and a sharp reduction in trade margins by companies. Leading therapies, which witnessed degrowth during the month, were anti-infectives (1%), cardiac (4%), vitamins (1%) and respiratory (3%). Key chronic therapies like anti-diabetic and neuro posted single digit growth of 6% and 5%, respectively. On a MAT (TTM) basis, the domestic pharma market grew 8.2% to | 72500 crore for August 2013. The acute: chronic ratio was 28:72. Sun Pharma is gaining market share in chronic and acute therapies in the last year. Its market share in chronic and acute has increased from 9.8% and 2.8% as per MAT August 2012 to 10.4% & 3.1% as per MAT August 2013, respectively. On the other hand, MNCs are losing market share. GSK is losing market share in the acute space while Novo Nordisk, Sanofi and Aventis are losing the same in the chronic space.
Exhibit 4: Domestic formulations - growth trend
20 18 16 14 12 10 8 6 4 2 0 18.8 13.3 12.5

Top brands in Indian pharma market
Company Brand Therapy Q1FY14 Q1FY13 Var.(%) GSK Augmentin Anti-Infectives 74 79 -6 Ranbaxy Revital Vitamins 66 51 30 Pfizer Corex Respiratory 54 59 -9 Ranbaxy Volini Pain 52 45 16 Novartis Voveran Pain 51 49 2 Mankind Manforce Sex Stimulant 50 41 20 GSK Calpol Pain 48 43 10 Pfizer Becosules Vitamins 47 43 11 Alkem Clavam Anti-Infectives 43 34 29 Cadila* Aciloc GI 43 42 2 Source: AIOCD database; *Cadila Pharma

9.8

(%)

7.4

5.2

5.6

8.7

9.3

Industry acute to chronic therapy ratio percentage…
Chronic, 20500.573, 28%

4.1

4.6

9.4 Jun-13 Jul-13 Aug-13 1.1

Nov-12

Sep-12

Dec-12

Jan-13

Oct-12

Aug-12

Mar-13

Feb-13

Apr-13

Indian Pharma Market

Acute, 51999.188, 72%

[

Source: AIOCD database, ICICIdirect.com Research

Exhibit 5: Company’s growth in domestic market in August 2013
Source: AIOCD database; As per AIOCD MAT August 2013
40 30 20 10 (%) 0 Sun Pharma Torrent Pharma Unichem Labs Ranbaxy Labs Novartis India Pfizer Natco Pharma -10 -20 -30 -40 Wockhardt -11.6 -6.5 6.6 0.1 14.9 -2.9 2.7 14.3 0.1 Lupin 2.2 0.8 -17.6 Glenmark Pharma GSK Pharma Ipca Labs Indoco -32.3 2.0 Elder Pharma Dr. Reddys Labs 4.9 2.2 Cadila Healthcare Biocon 21.8 34.0

Top 10 companies in acute and chronic therapies….
Acute Chronic Company MS (%) Company MS (%) 5.5 Sun Pharma 10.4 GSK Ranbaxy 4.7 Cipla 7.0 Mankind 4.3 Intas Pharma 5.3 Cipla 4.3 USV 4.9 Cadila Healthcare 4.0 Abbott Healthcare 4.8 Alkem Labs 4.0 Lupin 4.7 Abbott Healthcare 3.4 Cadila Healthcare 4.2 Sun Pharmaceutical 3.1 Sanofi-Aventis 4.0 Aristo Pharma 2.8 Torrent Pharma 3.7 Macleods 2.8 Novo Nordisk 3.6 Source: AIOCD database, as per latest MAT August 2013 data

May-13

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Cipla

Page 6

Acute : Chronic contribution (MAT Aug’13)

Sun Pharmaceuticals

Stock Performance
180

Chronic, 2132.9, 57%

Acute, 1595.0, 43%

135 90 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Sun Pharma Jul-13 Sep-13

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 6: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
19%

30 26.9 25.8 21.9 17.3 18.0 21.2 25 20 13.3 (%)

14.9

15.0

7.4

11% Top 10 11 to 20 21 to 30 31 to 50 Others

0 Nov-12 Aug-12 May-13 Aug-13 Oct-12 Dec-12 Jan-13 Sep-12 Mar-13 Jun-13 Feb-13 Apr-13 Jul-13

Source: AIOCD database

Indian Pharma Market

Sun Pharmaceutical Industries

Source: AIOCD database, ICICIdirect.com Research

Exhibit 7: Market share in Indian formulations market
5.4 5.2 5.0 (%) 4.8 4.6 4.4 4.2 Nov-12 Oct-12 Jul-13 Aug-12 May-13 Aug-13 Jan-13 Sep-12 Dec-12 Feb-13 Mar-13 Jun-13 Apr-13 4.6 4.6 4.7 5.1 5.2 5.5 5.3 5.3 5.1 5.4 5.1 5.2 5.2

Exhibit 8: Top 10 brands performance
Brand Pantocid Gemer Aztor Susten Levipil Pantocid Dsr Glucored Istamet Montek-Lc Oxetol Therapy Gastro Intestinal Anti Diabetic Cardiac Gynaecological Neuro Gastro Intestinal Anti Diabetic Anti Diabetic Respiratory Neuro 9.1 9.2 7.3 7.3 7.1 6.2 6.1 6.0 4.8 4.5 8.8 7.0 7.0 5.6 5.3 5.3 5.1 3.5 3.5 4.0 3 32 3 30 34 16 21 73 35 14

(| crore)
9.4 8.5 7.4 6.9 7.2 6.4 5.5 6.2 4.2 4.6 -3 9 -2 6 -2 -4 12 -4 15 -2

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

Sun Pharmaceutical Industries

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 9: Contribution of therapies to domestic sales (MAT Aug’13)
Gynaecological 10% Anti Diabetic 14%

Exhibit 10: Therapy wise performance
Therapy Neuro Aug '13 85.8 63.2 46.7 37.8 26.4 14.5 15.0 13.8 9.0 7.0 Aug'12 74.4 57.8 41.3 32.0 20.5 14.5 13.8 11.2 6.1 6.3 YoY (%) 15 9 13 18 28 0 8 23 46 11 Jul'13 89.5 65.5 49.1 34.1 27.0 15.6 16.0 12.8 9.5 7.1

(| crore)
QoQ (%) -4 -4 -5 11 -2 -7 -6 8 -6 -1

Neuro 34%

Cardiac Gastro Intestinal Anti Diabetic Gynaecological Ophthal Pain

Gastro Intestinal 17%

Cardiac 25%

Respiratory Vitamins Hormones

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 7

1.1

5

4.1

5.2

5.6

8%

4.6 11.9

10

8.7

9.3

51%

9.8

14.9

11%

9.4 15.6

15

12.5 17.4

18.8 24.1

Acute : Chronic contribution (MAT Aug’13)
Acute, 2238.3, 61%

Cipla

Stock Performance
140 110 80

Chronic, 1427.6, 39%

Sep-12

Nov-12

Jan-13

Mar-13 BSE Healthcare

May-13 Cipla

Jul-13

Sep-13

Source: NSE, ICICIdirect.com Research

Exhibit 11: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
20 12.5 15 13.3 18.8 14.8

9.8

27%
(%)

9.1

7.4

5.2

5.6

39%

11.1

5.8

6.3

4.8

5

4.1

4.6

11.5

10

9.3 12.1

8.7

9.4 14.7 Jul-13

Nov-12 -0.5

Mar-13 -1.1

Oct-12

Jan-13

Aug-12

May-13

12% Top 10 11 to 20 21 to 30

9% 31 to 50 Others
-5

Source: AIOCD database

Indian Pharma Market

Cipla

Source: AIOCD database, ICICIdirect.com Research

Exhibit 12: Market share in Indian formulations market
5.6 5.4 5.2 5.0 4.8 4.6 4.4 4.2 4.0 Aug-12 5.5 5.4 5.2 4.7 4.8 4.9 4.9 4.9 5.2 5.1 4.8 4.9 4.9

Exhibit 13: Top 10 brands performance
Brand Asthalin Foracort Seroflo Budecort Aerocort Novamox Mtp (Cipla) Duolin Emeset Ciplox Therapy Respiratory Respiratory Respiratory Respiratory Respiratory Anti-Infectives Gynaecological Respiratory Gastro Intestinal Anti-Infectives 12.1 11.5 9.3 7.5 7.5 7.4 0.9 7.2 6.0 6.3 11.6 9.5 9.4 7.0 7.2 8.2 12.1 6.3 5.5 6.2 4 21 -1 8 4 -9 -92 14 9 1

(| crore)
11.4 10.8 9.7 7.1 7.0 7.3 1.3 7.0 6.5 5.6 6 6 -3 6 8 2 -27 2 -8 12

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

(%)

Nov-12

Cipla

May-13

Aug-13

Oct-12

Jun-13

Sep-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 14: Contribution of therapies to domestic sales (MAT Aug’13)
Other 15% Gastro Intestinal 8% Gynaecological 10% Cardiac 12% Anti-Infectives 25%

Exhibit 15: Acute : Therapy wise performance
Therapy Respiratory Aug '13 92.0 87.3 37.4 19.9 27.2 10.2 9.2 7.8 6.9 7.3 Aug'12 81.9 75.1 35.1 37.2 26.6 8.9 7.6 7.7 6.0 5.3 YoY (%) 12 16 7 -46 2 14 20 2 15 38 Jul'13 88.7 86.2 37.1 20.6 29.2 10.6 9.2 9.1 7.8 7.6

(| crore)
QoQ (%) 4 1 1 -3 -7 -4 0 -14 -11 -4

Respiratory 30%

Anti-Infectives Cardiac Gynaecological Gastro Intestinal Ophthal Neuro Pain Vitamins Derma

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 8

Aug-13

Sep-12

Dec-12

Feb-13

Apr-13

Jun-13

13%

0

0.4

1.1 4.9

Acute : Chronic contribution (MAT Aug’13)
Acute, 1138.5, 71%

Dr Reddy’s Laboratories

Stock Performance
140 110

Chronic, 458.9, 29%

80 Sep-12 Nov-12 Jan-13 Mar-13 BSE Healthcare May-13 Dr. Reddys Jul-13 Sep-13

Source: NSE, ICICIdirect.com Research

Exhibit 16: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
35 30 18.8
31%

13.3

9.8

15 10

12.5

20.2

(%)

32%

20

24.0

26.5

25

28.7

5.6 10.4

5.2

12% 9% Top 10 11 to 20 21 to 30 16% 31 to 50

0 Aug-12

Nov-12

Oct-12

Jul-13

May-13

Others

Indian Pharma Market

Dr. Reddys Laboratories

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 17: Market share in Indian formulations market
2.3 2.2 2.1 (%) 2.0 1.9 1.8 1.7 Nov-12 May-13 Aug-12 Aug-13 Oct-12 Jun-13 Dec-12 Sep-12 Jan-13 Feb-13 Mar-13 Apr-13 Jul-13 1.9 1.9 2.1 2.1 2.0 1.9 1.9 2.0 2.2 2.2 2.1 2.1 2.1

Exhibit 18: Top 10 brands performance
Brand Omez Nise Stamlo Omez D Econorm Razo Stamlo Beta Reditux Mintop Grafeel Therapy Gastro Intestinal Pain Cardiac Gastro Intestinal Gastro Intestinal Gastro Intestinal Cardiac Anti-Neoplastics Derma Anti-Neoplastics 9.4 6.0 4.2 5.7 3.8 3.6 3.5 3.4 4.2 1.3 9.9 6.4 4.9 4.4 3.9 3.9 3.4 2.3 3.4 0.5 -4 -6 -14 29 -2 -7 4 50 23 134

(| crore)
9.8 6.3 4.9 5.5 4.6 3.6 3.5 3.3 4.3 1.9 -3 -4 -13 4 -17 1 0 4 -1 -33

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

Dr. Reddys Laboratories

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 19: Contribution of therapies to domestic sales (MAT Aug’13)
Other 30% Gastro Intestinal 23%

Exhibit 20: Acute : Therapy wise performance
Therapy Gastro Intestinal Cardiac Anti-Neoplastics Pain Aug '13 32.5 21.9 14.6 12.1 11.6 9.6 9.2 6.4 5.2 5.3 Aug'12 32.9 22.3 11.7 12.7 12.2 8.6 7.7 6.8 5.3 5.2 YoY (%) -1 -2 24 -5 -5 11 19 -6 -1 2 Jul'13 33.8 22.5 14.2 12.6 11.3 9.5 8.5 6.2 5.3 5.2

(| crore)
QoQ (%) -4 -3 3 -4 2 1 8 2 -2 1

Anti-Infectives 8%

Cardiac 17% Pain 9% AntiNeoplastics 13%

Anti-Infectives Derma Anti Diabetic Respiratory Gynaecological Stomatologicals

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 9

Aug-13

Jan-13

Mar-13

Dec-12

Sep-12

Jun-13

Feb-13

Apr-13

1.1 2.0

5.5

4.9

3.6

5.4

1.2

5

4.1

4.6

9.4 13.1

9.3

7.4

14.2

8.7

Acute : Chronic contribution (MAT Aug’13)
Acute, 1221.4, 56% Chronic, 961.7, 44%

Lupin

Stock Performance
155 115 75 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Lupin Jul-13 Sep-13

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 21: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
44% 20%
(%) 25 20 13.3 15 10 8.8 5 12.5 18.8 21.3

16.0

9.8 13.7

8.7 14.3

9.3 14.4

12.6

4.1 9.8

7.4 11.3

4.6

7.6 Jul-13

14% 13% 9% 21 to 30

5.2 8.7

5.6

9.4

0 Nov-12 Oct-12 Jan-13 Mar-13 Dec-12 Sep-12 May-13 Aug-12 Feb-13 Apr-13

Top 10

11 to 20

31 to 50

Others

Source: AIOCD database

Indian Pharma Market

Lupin

Source: AIOCD database, ICICIdirect.com Research

Exhibit 22: Market share in Indian formulations market
3.2 3.2 3.1 3.1 3.0 3.0 2.9 2.9 2.8
Aug-12

Exhibit 23: Top 10 brands performance
Brand Therapy Cardiac Anti Diabetic Respiratory Cardiac Anti-Infectives Anti-Infectives Gastro Intestinal Anti-Infectives Anti-Infectives Gastro Intestinal Tonact 5.9 8.3 3.8 3.7 3.1 3.4 3.2 3.0 3.2 3.1 6.7 5.8 3.5 3.5 3.1 3.4 3.3 3.5 3.4 2.9 -13 42 11 6 -2 1 -4 -14 -8 7

(| crore)
6.8 7.4 3.9 3.8 3.2 3.5 3.6 3.2 3.0 3.4 -13 11 -2 -2 -4 -2 -10 -5 6 -8

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

3.15 3.16 3.14 3.04 3.05 2.98 2.94

3.11 3.10 3.11 3.03 2.95 2.95

Gluconorm-G Budamate Ramistar R-Cinex Merotrol Rablet

(%)

Nov-12

May-13

Aug-13

Oct-12

Jun-13

Sep-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

L-Cin Tazar Rablet-D

Lupin

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 24: Contribution of therapies to domestic sales (MAT Aug13)
Other 21% Gastro Intestinal 8% Anti-Infectives 27%

Exhibit 25: Therapy wise performance
Therapy Anti-Infectives Cardiac Respiratory Anti Diabetic Gastro Intestinal Vitamins Neuro Aug '13 49.4 43.8 20.0 18.3 15.5 12.3 9.7 8.1 4.7 1.1 Aug'12 54.0 43.2 18.9 15.1 15.4 11.8 10.5 7.4 5.6 1.3 YoY (%) -8 2 6 22 0 4 -8 9 -16 -15 Jul'13 53.2 45.7 20.4 16.3 17.0 12.9 9.9 8.7 5.4 1.3

(| crore)
QoQ (%) -7 -4 -2 13 -9 -5 -2 -7 -12 -15

Anti Diabetic 9%

Respiratory 11%

Cardiac 24%

Pain Gynaecological Hormones

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 10

Aug-13

Jun-13

1.1 0.1

3.2

Acute : Chronic contribution (MAT Aug’13)
Chronic, 529.2, 18%

Ranbaxy Laboratories

Stock Performance
Acute, 2461.8, 82%
110 75 40 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Ranbaxy Jul-13 Sep-13

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 26: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
25
20.1 9.8 15.6

13.3

15
(%)

12.5

38%

33%

20

18.8 21.6

11.8

7.4

10
6.2

5.2 7.0

5.6

8.7

9.3

6.0

4.6

1.5

4.8

Nov-12

Oct-12

Jul-13

Top 10

11% 11 to 20 21 to 30

31 to 50

Others

-5

Source: AIOCD database

Indian Pharma Market

Ranbaxy Laboratories

Source: AIOCD database, ICICIdirect.com Research

Exhibit 27: Market share in Indian formulations market
4.8 4.4 4.52 4.31 4.01 4.70 4.37 4.26 4.02 4.02 4.05 4.21 3.88 3.95 3.97

Exhibit 28: Top 10 brands performance
Brand Revital Volini Mox Storvas Rosuvas Cilanem Cifran Zanocin Silverex Ionic Tevran Therapy Vitamins Pain Anti-Infectives Cardiac Cardiac Anti-Infectives Anti-Infectives Anti-Infectives Derma Anti-Infectives 22.7 21.7 7.2 5.0 6.3 8.6 5.9 4.4 4.9 2.4 20.8 17.8 8.2 8.4 5.5 9.2 6.6 5.5 3.7 1.4 9 22 -12 -40 14 -6 -10 -21 33 66

May-13

Aug-12

(| crore)
21.5 20.0 6.3 5.6 6.2 8.2 4.6 4.5 5.4 9.2 5 9 14 -9 1 5 28 -3 -10 -74

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

(%)

4.0 3.6

Nov-12

Aug-12

Ranbaxy Laboratories

May-13

Aug-13

Oct-12

Jun-13

Dec-12

Sep-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 29: Contribution of therapies to domestic sales (MAT Aug’13)
Other 23% Anti-Infectives 30%

Exhibit 30: Therapy wise performance
Therapy Anti-Infectives Pain Derma Vitamins Cardiac Gastro Intestinal Respiratory Gynaecological Neuro Anti Diabetic Aug '13 80.3 34.2 32.5 28.1 24.1 13.3 10.4 6.9 5.4 5.5 Aug'12 76.8 30.5 31.3 26.2 28.6 15.4 9.4 7.1 5.7 5.9 YoY (%) 5 12 4 7 -16 -14 10 -3 -5 -7 Jul'13 82.8 32.8 32.0 27.5 24.3 14.2 10.3 6.6 5.4 4.9

Aug-13

Jan-13

Mar-13

Dec-12

Sep-12

Feb-13

Apr-13

7%

Jun-13 -1.1

11%

0

4.0

1.1 0.1

5

4.1

4.6

9.4

(| crore)
QoQ (%) -3 4 2 2 -1 -6 1 5 1 11

Cardiac 11%

Vitamins 11%

Derma 12%

Pain 13%

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 11

Acute : Chronic contribution (MAT Aug’13)

Cadila Healthcare

Stock Performance
140

Acute, 2103.1, 71% Chronic, 859.7, 29%

110 80 50 Sep-12 Nov-12 Jan-13 Mar-13 BSE Healthcare May-13 Cadila Healthcare Jul-13 Sep-13

Source: NSE, ICICIdirect.com Research

Exhibit 31: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
28%

35 30 25
24.4 (%) 32.6

18.8

24.0

25.2

27.4 20.0

13.3

38%

20 15 10

12.5 18.8

18.8

18.0

9.8

23.4

5.2

14% 11% Top 10 11 to 20 21 to 30 9% 31 to 50 Others

0
Nov-12 Oct-12 Jul-13 Jan-13 Mar-13 Dec-12 Sep-12 May-13 Aug-12 Jun-13 Feb-13 Apr-13

Indian Pharma Market

Cadila Healthcare

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 32: Market share in Indian formulations market
4.6 4.4 4.2 4.0 3.8 3.6 3.4 3.2 4.0 3.9 4.1 4.2 4.1 4.3 4.4 4.3 4.2 4.2 4.3 4.0 4.1

Exhibit 33: Top 10 brands performance
Brand Skinlite Pantodac Atorva Mifegest Kit Deriphyllin Aten Dexona Amlodac Falcigo Dulcolax Therapy Derma Gastro Intestinal Cardiac Gynaecological Respiratory Cardiac Hormones Cardiac Anti Malarials Gastro Intestinal 9.9 8.0 6.8 7.3 7.7 6.9 6.4 5.5 6.4 4.2 7.2 10.2 8.2 6.0 6.6 8.0 5.8 5.2 7.9 4.4 39 -22 -18 22 17 -14 12 7 -19 -5

(| crore)
10.1 8.2 6.9 7.5 7.4 6.1 6.1 5.4 4.1 4.1 -2 -2 -2 -2 3 13 5 3 56 3

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

(%)

Nov-12

Cadila Healthcare

May-13

Aug-12

Aug-13

Oct-12

Jun-13

Dec-12

Jan-13

Sep-12

Feb-13

Mar-13

Apr-13

Jul-13

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 34: Contribution of therapies to domestic sales (MAT Aug’13)
Cardiac 17% Other 35%

Exhibit 35: Therapy wise performance
Therapy Cardiac Gastro Intestinal Aug '13 43.3 44.4 30.1 24.7 20.4 17.2 17.6 9.4 9.8 8.1 Aug'12 44.6 47.3 31.2 22.5 20.9 17.5 13.6 9.3 8.1 6.6 YoY (%) -3 -6 -4 10 -2 -2 29 0 20 23 Jul'13 41.6 44.1 29.3 24.0 20.5 17.8 17.5 9.8 10.4 7.7

(| crore)
QoQ (%) 4 1 3 3 0 -3 1 -4 -6 5

Gastro Intestinal 17%

Gynaecological Respiratory Pain Anti-Infectives Derma Vitamins Anti-Neoplastics Hormones

Pain 8%

Gynaecological 13% Respiratory 10%

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 12

Aug-13

1.1 2.2

5

4.6 8.6

4.1

9.4 11.4

7.4

5.6

8.7

9.3

Acute : Chronic contribution (MAT Aug’13)
Chronic, 275.0, 9%

GlaxoSmithKline Pharmaceuticals

Stock Performance
140 110
Acute, 2839.3, 91%

80 Sep-12 Nov-12 Jan-13 Mar-13 May-13 GSK Pharma Jul-13 Sep-13

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 36: Company growth vis-à-vis Indian pharma market growth
20 15 10 43% 13%
(%) 18.8 13.3 19.1 12.5 17.4

Brands contribution to domestic sales (MAT Aug’13)
18%

25

9.8

5.2

9.3 -5.2

12.0

7.4

5.6

8.7

4.6 -7.7

9.4 -5.5 Jul-13

4.1

8.0

1.6

2.1

0
Oct-12 Aug-12 Sep-12

Nov-12

0.5

-9.0

5 -5 -10

10% Top 10 11 to 20 21 to 30

16% 31 to 50 Others

-15 -20 Indian Pharma Market Glaxosmithkline Pharmaceuticals

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 37: Market share in Indian formulations market
5.0 4.8 4.6 4.8 4.7 4.6 4.6 4.6 4.3 4.3 4.1 4.0 4.1 4.1 4.0

Exhibit 38: Top 10 brands performance
Brand Augmentin Calpol Zinetac Eltroxin Ceftum
3.9

May-13

(| crore)
30.9 20.4 14.1 10.4 13.2 8.7 7.9 9.7 9.4 8.1 -35 -20 -13 7 -24 5 6 -31 -31 -13 25.2 15.5 12.0 10.5 12.2 9.0 8.0 6.0 4.0 7.6 -20 5 3 5 -18 1 5 11 62 -8

Therapy Anti-Infectives Pain Gastro Intestinal Hormones Anti-Infectives Derma Derma Hormones Anti-Infectives Derma

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%) 20.0 16.3 12.3 11.1 10.0 9.1 8.3 6.6 6.5 7.0

(%)

4.4 4.2 4.0 3.8

Betnovate C Betnovate N Betnesol Phexin T Bact

Nov-12

Aug-12

Glaxosmithkline Pharmaceuticals

May-13

Aug-13

Oct-12

Jun-13

Sep-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 39: Contribution of therapies to domestic sales (MAT Aug’13)
Other 27% Anti-Infectives 30%

Exhibit 40: Therapy wise performance
Therapy Anti-Infectives Derma Pain Vitamins Hormones Respiratory Aug '13 65.1 47.7 28.1 20.0 18.7 16.1 16.3 13.0 7.8 6.1 Aug'12 92.3 48.0 33.5 27.5 21.0 18.4 19.9 12.8 8.8 8.4 YoY (%) -30 -1 -16 -27 -11 -13 -18 2 -11 -28 Jul'13 73.7 47.2 27.6 20.5 17.5 16.9 16.5 13.1 9.9 7.6

(| crore)
QoQ (%) -12 1 2 -2 7 -5 -1 -1 -21 -19

Hormones 7% Vitamins 8% Derma 17%

Gastro Intestinal Vaccines Cardiac Gynaecological

Pain 11%

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 13

Aug-13

Jan-13

Mar-13 -7.8

Dec-12

Feb-13

Jun-13

Apr-13

1.1 -17.6

Acute : Chronic contribution (MAT Aug’13)
Chronic, 285.2, 24%

Wockhardt

Stock Performance
265 205 145 85

Acute, 893.5, 76%

25 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Wockhardt Jul-13 Sep-13 BSE Healthcare

Source: NSE, ICICIdirect.com Research

Brands contribution to domestic sales (MAT Aug’13)
17% 12% 42%

Exhibit 41: Company growth vis-à-vis Indian pharma market growth
18.8

13.3

20 15 10 5
(%)

12.5

9.8

12.0

7.4

5.2 -5.0

5.6

8.7

9.3

1.4

-6.8 4.6

8.6

4.1

9.4 Jun-13 -20.0

-2.7 Mar-13 -6.4 Nov-12 -7.2 -8.7

25

0 -5

2.0

Aug-12

12% 17% Top 10 11 to 20 21 to 30 31 to 50 Others

-10 -15 -20 -25

Source: AIOCD database

Indian Pharma Market

Wockhardt

Source: AIOCD database, ICICIdirect.com Research

Exhibit 42: Market share in Indian formulations market
1.9 1.8 1.86 1.84 1.68 1.73 1.67 1.64 1.69 1.64 1.62 1.63 1.53 1.49 1.47

Exhibit 43: Top 10 brands performance
Brand Practin Spasmo Proxyvon Tryptomer Decdan Bro Zedex Dexolac 1 Methycobal Zedex Dexolac 2 Wokadine Therapy Vitamins Gastro Intestinal Neuro Hormones Respiratory Vitamins Vitamins Respiratory Vitamins Derma 7.5 0.5 4.9 3.6 4.6 4.0 3.6 3.0 3.0 2.8 6.2 6.5 4.7 4.1 3.5 4.6 4.0 3.1 3.3 3.4 20 -93 6 -14 31 -12 -12 -3 -9 -17

May-13

(| crore)
6.8 0.5 5.1 3.9 4.3 4.1 3.7 3.3 3.3 3.4 11 2 -3 -8 7 -1 -4 -8 -9 -17

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

(%)

1.7 1.6 1.5 1.4

Nov-12

Aug-12

Wockhardt

May-13

Aug-13

Oct-12

Jun-13

Dec-12

Jan-13

Sep-12

Feb-13

Mar-13

Apr-13

Jul-13

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 44: Contribution of therapies to domestic sales (MAT Aug’13)
Other 33%

Exhibit 45: Therapy wise performance
Therapy Aug '13 29.5 12.3 8.3 8.5 8.4 5.9 1.5 4.4 3.8 5.6 Aug'12 31.3 11.0 9.8 8.7 8.6 6.5 7.9 6.3 4.7 1.8 YoY (%) -6 11 -16 -3 -2 -9 -81 -29 -19 205 Jul'13 29.7 12.5 7.9 8.4 10.2 7.6 1.6 4.9 4.6 3.2 Vitamins Respiratory Anti Diabetic Neuro Derma

(| crore)
QoQ (%) -1 -2 5 1 -18 -22 -6 -10 -17 75

Vitamins 29%

Derma 8% Neuro 9%

Respiratory 12% Anti Diabetic 9%

Anti-Infectives Gastro Intestinal Pain Hormones Others

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 14

Aug-13 -11.6

Oct-12

Dec-12

Jan-13 2.6

Sep-12

Feb-13

Apr-13

Jul-13

1.1

Acute : Chronic contribution (MAT Aug’13)
Acute, 993.9, 67%

Glenmark Pharmaceuticals

Stock Performance
200 160 120

Chronic, 486.3, 33%

80 Sep-12 Nov-12 Jan-13 Mar-13 BSE Healthcare May-13 Glenmark Jul-13 Sep-13

Source: NSE, ICICIdirect.com Research

Exhibit 46: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
28% 38%

25
13.3 20.5 21.8 Aug-13 1.1 Jul-13

20.0

20 15
(%)

18.8 23.3

12.5

9.8 15.7

17.7

9.3 14.5

12.4

10.9

5.2 9.6

7.4 10.3

10 5
11% 10% Top 10 11 to 20 21 to 30 13% 31 to 50 Others

5.6

8.7

4.1

0
Nov-12 Oct-12 Jan-13 Mar-13 Dec-12 Sep-12 May-13 Aug-12 Jun-13 Feb-13 Apr-13

Indian Pharma Market

Glenmark Pharmaceuticals

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 47: Market share in Indian formulations market
2.5 2.3
(%)

Exhibit 48: Top 10 brands performance
Brand
2.30

5.0

4.6

9.4

Therapy Cardiac Cardiac Respiratory Derma Derma Cardiac Respiratory Derma Anti-Infectives Derma

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%) 11.4 8.9 7.2 6.8 4.8 3.8 2.2 2.5 2.4 1.7 8.1 7.1 7.4 6.3 4.4 2.8 1.9 1.9 2.2 1.6 41 26 -2 7 9 33 14 30 10 8 10.7 9.0 7.1 6.6 4.5 3.6 2.2 2.4 3.0 1.7 7 -1 1 2 6 4 1 4 -20 1

Telma Telma H Ascoril Plus Candid-B Candid Telma Am Alex Candid Mouth Lizolid Elovera

2.1 1.9 1.7 1.5
Nov-12 Aug-12

2.13 2.12 1.96 1.91 1.96 1.94

2.03 2.05 2.05

2.10 1.91 1.94

Glenmark Pharmaceuticals

May-13

Aug-13

Oct-12

Jun-13

Dec-12

Sep-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 49: Contribution of therapies to domestic sales (MAT Aug’13)
Anti Diabetic 5% Other 13% Derma 29%

Exhibit 50: Therapy wise performance
Therapy Derma Cardiac Respiratory Anti-Infectives Aug '13 40.3 32.7 20.3 28.5 7.1 3.4 3.1 2.7 2.9 3.2 Aug'12 36.7 24.4 17.5 20.9 4.9 4.4 2.5 2.5 2.1 3.2 YoY (%) 10 34 16 37 47 -23 22 7 34 1 Jul'13 39.6 32.0 19.3 20.0 7.1 3.6 3.7 3.0 2.8 2.9

18.9

(| crore)

(| crore)
QoQ (%) 2 2 5 43 0 -5 -16 -9 1 14

Anti-Infectives 15%

Anti Diabetic Pain Gynaecological Gastro Intestinal Vitamins Ophthal

Respiratory 16%

Cardiac 22%

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 15

Acute : Chronic contribution (MAT Aug’13)

Torrent Pharmaceuticals

Stock Performance
140

Acute, 498.8, 39% Chronic, 764.5, 61%

110 80 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Torrent Pharma Jul-13 Sep-13

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 51: Company growth vis-à-vis Indian pharma market growth
20 18 16 14 12 10 8 6 4 2 0
18.8 13.3 12.5 16.9

Brands contribution to domestic sales (MAT Aug’13)

9.8 11.5

8.9

9.8

8.7 10.5

(%)

9.9

7.4

9.3

4.1

4.6 8.6

5.6 7.6

5.2

8.0

7.7

7.8

9.4

36%

15.5 Nov-12 Jul-13 May-13

27%

Oct-12

Aug-12

Top 10

11 to 20

21 to 30

31 to 50

Others

Source: AIOCD database

Indian Pharma Market

Torrent Pharmaceuticals

Source: AIOCD database, ICICIdirect.com Research

Exhibit 52: Market share in Indian formulations market
1.9 1.8 1.7 1.74 1.75 1.76 1.67 1.60 1.66 1.79 1.71 1.70 1.83 1.79 1.79 1.76

Exhibit 53: Top 10 brands performance
Brand Nikoran Alprax Dilzem Nebicard Nexpro Rd Topcef Azulix-Mf Therapy Cardiac Neuro / Cns Cardiac Cardiac Gastro Intestinal Anti-Infectives Anti Diabetic Gastro Intestinal Gastro Intestinal Cardiac 5.0 3.3 3.3 3.7 2.9 2.9 2.9 2.5 2.1 2.3 3.8 3.6 2.9 2.8 2.5 3.0 2.2 2.3 4.5 1.9 32 -7 13 31 19 -4 35 9 -53 25

(| crore)
5.2 4.0 3.4 3.6 3.2 2.9 2.7 2.6 2.5 2.3 -3 -18 -2 3 -9 -2 9 -5 -16 2

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

(%)

1.6 1.5 1.4

Nov-12

Aug-12

May-13

Aug-13

Oct-12

Jun-13

Sep-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

Nexpro Domstal Deplatt-A

Torrent Pharmaceuticals

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 54: Contribution of therapies to domestic sales (MAT Aug’13)
Pain 6% Gastro Intestinal 11% Other 10% Cardiac 36%

Exhibit 55: Therapy wise performance
Therapy Cardiac Anti-Infectives Neuro Gastro Intestinal Pain Anti Diabetic Respiratory Aug '13 25.9 11.4 6.6 7.1 2.1 1.8 1.3 1.2 0.8 0.4 Aug'12 29.0 10.5 6.9 7.4 2.1 2.1 1.9 1.3 1.1 0.2 YoY (%) -11 8 -6 -4 -1 -12 -30 -7 -33 67 Jul'13 40.1 22.7 22.7 12.6 6.6 2.9 2.5 2.0 2.3 0.5

(| crore)
QoQ (%) -35 -50 -71 -43 -68 -36 -46 -38 -67 -16

Neuro 17%

Anti-Infectives 20%

Vitamins Derma Gynaecological

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 16

Aug-13

Jan-13

Mar-13

Dec-12

Sep-12

Jun-13

Feb-13

Apr-13

14%

14% 9%

1.1

6.6

Acute : Chronic contribution (MAT Aug’13)
Chronic, 313.6, 27% Acute, 863.3, 73%

Ipca Laboratories

Stock Performance
200 140 80 Sep-12 Nov-12 Jan-13 Mar-13 BSE Healthcare May-13 Ipca Jul-13 Sep-13

Source: NSE, ICICIdirect.com Research

Exhibit 56: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
23% 35%

30
18.8 21.2 26.1

25
12.5 21.1

20
13.3

9.3 15.8

15
(%)

7.4 13.8

5.6 10.5

9.7

5.2

10 5 0

4.1

Nov-12 -3.7

Oct-12

4.4

Jul-13

May-13

Aug-12

12% Top 10 11 to 20 21 to 30

18% 31 to 50 Others

-5 -10

Indian Pharma Market

Ipca Laboratories

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 57: Market share in Indian formulations market
2.0 1.9 1.8 1.95 1.96 1.77 1.69

Exhibit 58: Top 10 brands performance
Brand Therapy Anti Malarials Pain Anti Malarials Anti Malarials Pain Anti Malarials Anti Malarials Anti Diabetic Anti-Infectives Pain Rapither-Ab 6.3 6.2 6.5 6.6 4.5 3.8 3.9 2.9 2.1 2.4 6.4 5.1 5.1 7.5 3.6 4.2 3.9 2.3 2.7 2.3 -3 21 28 -12 27 -10 0 24 -23 4

(| crore)
6.7 5.2 5.6 7.0 5.1 3.8 3.7 2.6 2.1 2.7 -7 19 18 -6 -11 0 5 8 3 -9

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

1.91 1.84 1.84 1.72 1.67 1.67 1.71 1.75 1.71

Zerodol P Larinate Lariago Zerodol Sp Hcqs Lumerax

(%)

1.7 1.6 1.5 1.4

Nov-12

Aug-12

May-13

Aug-13

Oct-12

Jun-13

Sep-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

Glycinorm M Azibact Zerodol

Ipca Laboratories

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 59: Contribution of therapies to domestic sales (MAT Aug’13)
Other 22% Anti Malarials 23%

Exhibit 60: Therapy wise performance
Therapy Anti Malarials Pain Cardiac Gastro Intestinal Anti-Infectives Anti Diabetic Aug '13 31.1 23.3 16.3 8.1 7.3 5.6 4.3 3.0 2.7 2.6 Aug'12 32.1 20.6 15.5 8.7 8.1 5.6 4.3 2.9 2.5 2.8 YoY (%) -3 13 5 -7 -10 1 2 3 7 -4 Jul'13 32.4 23.9 17.1 10.0 7.4 5.3 5.0 2.8 2.6 2.8

(| crore)
QoQ (%) -4 -3 -5 -19 -1 6 -12 7 2 -4

Anti-Infectives 8%

Gastro Intestinal 9%

Cardiac 17%

Pain 21%

Respiratory Neuro Anti-Neoplastics Derma

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 17

Aug-13 2.2

Jan-13

Mar-13

Dec-12

Sep-12

Jun-13

Feb-13

Apr-13

1.1

12%

11.3

4.6

14.2

8.7

9.4 18.1

9.8

Acute : Chronic contribution (MAT Aug’13)
Acute, 58.6, 24%

Biocon

Stock Performance
130 110

Chronic, 181.0, 76%

90 Sep-12 Nov-12 Jan-13 Mar-13 BSE Healthcare May-13 Biocon Jul-13 Sep-13

Source: NSE, ICICIdirect.com Research

Exhibit 61: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
19%

120 100 80 60 (%) 12.5 55.5 99.0 13.3 18.8 48.7 9.8 Jan-13 -12.3 5.2 -2.8 7.4 5.6 Mar-13 -28.2 8.7 9.3 4.1 May-13 31.1 Nov-12 -5.9 Apr-13 -21.1 4.6 Jul-13 9.4 Dec-12 Feb-13 1.0 Indian Pharma Market Biocon Jun-13

20
6% 2%

Oct-12 -7.3

0 -20
Others

8.2

Top 10

11 to 20

21 to 30

31 to 50

-40

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 62: Market share in Indian formulations market
0.45 0.40 0.35 (%) 0.30 0.25 0.20 0.15 Nov-12 Aug-12 May-13 Aug-13 Oct-12 Sep-12 Dec-12 Mar-13 Jun-13 Jan-13 Feb-13 Apr-13 Jul-13 0.20 0.18 0.20 0.30 0.24 0.24 0.22 0.22 0.21 0.22 0.38 0.40 0.39

Aug-12

Exhibit 63: Top 10 brands performance
Brand Insugen Basalog Blisto Mf Abraxane Metadoze-Ipr Statix Insugen R Erypro Trigpm Myokinase Therapy Anti Diabetic Anti Diabetic Anti Diabetic Anti-Neoplastics Anti Diabetic Cardiac Anti Diabetic Blood Related Anti Diabetic Cardiac 5.6 2.4 2.1 1.4 0.8 0.7 1.1 0.6 0.2 0.4 5.4 1.9 0.8 0.9 0.8 0.6 0.4 0.8 0.5 0.4 4 30 154 57 0 6 177 -27 -52 19

(| crore)
6.0 2.3 2.0 3.3 0.8 0.6 1.1 0.6 0.1 0.5 -6 4 3 -57 -1 4 -5 -6 223 -20

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

Biocon

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 64: Contribution of therapies to domestic sales (MAT Aug’13)
Blood Related 3% Anti-Infectives 9% AntiNeoplastics 10% Other 6%

Exhibit 65: Therapy wise performance
Therapy Anti Diabetic Cardiac Anti-Neoplastics Anti-Infectives Blood Related Aug '13 13.8 3.5 2.7 3.1 0.6 0.5 0.3 0.2 0.1 0.1 Aug'12 10.8 2.8 1.3 1.7 0.8 0.4 0.5 0.3 0.1 0.0 YoY (%) 28 26 100 81 -27 30 -28 -26 35 807 Jul'13 13.8 3.3 4.2 2.6 0.6 0.5 0.4 0.3 0.1 0.0

(| crore)
QoQ (%) 0 8 -36 19 -6 0 -12 -16 41 48

Anti Diabetic 57%

Derma Others Vitamins Neuro Gastro Intestinal

Cardiac 15%

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 18

Aug-13

Sep-12

1.1 34.0

65%

8%

40

Acute : Chronic contribution (MAT Aug’13)
Chronic, 251.2, 15%

Pfizer

Stock Performance
Acute, 1458.2, 85%
135 105 75 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Pfizer Jul-13 Sep-13

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 66: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
9% 8% 7%

20 13.3 16.8 15 10 (%) 5 12.5 16.8

17.0

18.8

9.8 14.0

10.8

7.4

5.2

5.6 9.0

4.1 7.4

6.2

4.6

9.4 11.4 1.6

8.7

9.3

63%

May-13 -0.3

Aug-12

Top 10

11 to 20

21 to 30

31 to 50

Others

-5

Indian Pharma Market

Pfizer

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 67: Market share in Indian formulations market
2.6 2.47 2.4 2.51 2.55 2.54 2.38 2.37 2.35 2.37 2.27 2.23 2.25

Exhibit 68: Top 10 brands performance
Brand Corex Becosules Therapy Respiratory Vitamins Anti-Infectives Pain Gastro Intestinal Cardiac Anti-Infectives Hormones Anti-Infectives Neuro 24.1 14.6 15.2 9.2 8.3 7.7 6.2 5.0 3.5 3.6 23.4 17.2 11.8 9.2 9.9 6.9 7.8 6.2 3.0 2.9 3 -15 29 0 -16 11 -21 -19 17 24

(| crore)
23.3 16.8 13.6 9.3 8.4 7.1 6.0 5.4 3.4 3.7 3 -13 12 -2 -1 9 3 -8 5 -3

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

(%)

2.35

2.31

Magnex Dolonex Gelusil Mps Minipress Xl Dalacin C

2.2

2.0

Nov-12

Aug-12

May-13

Aug-13

Oct-12

Jun-13

Dec-12

Sep-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

Solu Medrol Claribid Lyrica

Pfizer

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 69: Contribution of therapies to domestic sales (MAT Aug’13)
Other 31% Anti-Infectives 20%

Exhibit 70: Therapy wise performance
Therapy Anti-Infectives Respiratory Vitamins Cardiac Aug '13 32.2 28.1 17.7 13.6 11.7 11.9 10.1 6.9 4.7 4.2 Aug'12 31.4 27.3 20.2 13.5 11.9 13.0 11.5 6.1 5.3 3.9 YoY (%) 2 3 -12 1 -2 -9 -13 14 -11 7 Jul'13 29.9 27.6 20.0 12.9 11.8 12.2 10.7 7.0 4.9 4.1

(| crore)
QoQ (%) 8 2 -12 6 -1 -2 -6 -1 -3 3

Respiratory 19% Pain 8% Cardiac 9% Vitamins 13%

Pain Gastro Intestinal Hormones Neuro / Cns Gynaecological Derma

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 19

Aug-13 -2.9

0 Nov-12 Oct-12 Jan-13 Sep-12 Feb-13 Mar-13 Dec-12

0.1

13%

Apr-13

Jun-13

Jul-13

1.1

Acute : Chronic contribution (MAT Aug’13)
Acute, 844.2, 73%

Novartis India

Stock Performance
150 100 50 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Novartis India Jul-13 Sep-13

Chronic, 307.6, 27%

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 71: Company growth vis-à-vis Indian pharma market growth
9% 7%

20

12.5

9.8

(%)

7.4

10

4.1 8.0

5.2

5.6

Mar-13 -1.7

May-13 2.2

0
Top 10 11 to 20 21 to 30 31 to 50 Others

Nov-12

Oct-12

Jan-13

Jul-13

Aug-12

-5

Indian Pharma Market

Novartis India

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 72: Market share in Indian formulations market
1.8 1.7 1.6 1.55 1.47 1.44 1.65 1.66 1.69 1.59 1.61 1.61 1.56 1.60 1.57 1.49

Exhibit 73: Top 10 brands performance
Brand Voveran Galvus Met Rabipur Galvus Otrivin Methergin Tegrital Therapy Pain Anti Diabetic Vaccines Anti Diabetic Respiratory Gynaecological Neuro Gynaecological Gynaecological Vitamins 13.9 10.8 5.3 6.2 5.4 3.5 5.5 3.0 3.3 2.8 16.2 8.5 5.8 5.0 4.7 4.2 4.0 3.2 3.6 2.5 -14 26 -9 23 15 -17 38 -5 -8 14

(| crore)
18.0 11.0 5.9 5.9 4.8 4.7 5.0 3.3 3.9 2.7 -23 -2 -10 4 13 -27 8 -6 -16 5

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

(%)

1.5 1.4 1.3 1.2

Nov-12

Aug-12

May-13

Aug-13

Oct-12

Jun-13

Sep-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

Jul-13

Regestrone Syntocinon Macalvit

Novartis India

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 74: Contribution of therapies to domestic sales (MAT Aug’13)
Other 26% Pain 25%

Exhibit 75: Therapy wise performance
Therapy Pain Anti Diabetic Gynaecological Respiratory Vitamins Aug '13 21.8 17.7 10.2 11.4 9.4 8.2 6.4 5.3 2.1 1.5 Aug'12 24.8 14.1 11.4 10.3 8.3 6.3 7.1 5.8 1.5 1.7 YoY (%) -12 25 -10 10 14 31 -11 -9 40 -14 Jul'13 26.8 17.6 12.3 10.6 10.0 7.7 5.6 5.9 2.1 1.6

(| crore)
QoQ (%) -19 0 -17 7 -6 6 14 -10 -1 -8

Vitamins 9% Anti Diabetic 17% Respiratory 11% Gynaecological 12%

Neuro Anti-Infectives Vaccines Ophthal Cardiac

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 20

Aug-13

Sep-12

Feb-13

Dec-12

Apr-13

Jun-13

1.1 2.7

15%

2.8

2.8

3.8

1.2

2.6

1.4

62%

6.4

5

4.6

9.4 11.3

8.7

9.3

7%

15.4

15

13.3

18.8

Brands contribution to domestic sales (MAT Aug’13)

Acute : Chronic contribution (MAT Aug’13)

Unichem Laboratories

Stock Performance
160 Acute, 281.2, 39% 130 100 70 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Unichem Labs Jul-13 Sep-13

Chronic, 448.4, 61%

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 76: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
18%
25 20 13.3 15 (%) 12.5 18.8

9.8

13.3

9.9

8.8

5.2

5.4

5.4

5.6 Jul-13

4.6

4.9

Nov-12

Aug-12

Jun-13

-5

Top 10

11 to 20

15%

-10

21 to 30

31 to 50

Others

Indian Pharma Market

Unichem Laboratories

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 77: Market share in Indian formulations market
1.15 1.10 1.05 (%) 1.00 0.95 0.90 Nov-12 Aug-12 Mar-13 Jun-13 Oct-12 Jan-13 Apr-13 Jul-13 Sep-12 Feb-13 May-13 Dec-12 1.00 1.00 0.97 0.95 0.92 Aug-13 1.03 1.10 1.06 1.03 1.03 1.00 0.99 0.98

Exhibit 78: Top 10 brands performance
Brand Losar H Losar Ampoxin Unienzyme Trika Vizylac Linox Telsar Telsar-H Unistar (Unichem) Therapy Cardiac Cardiac Anti-Infectives Gastro Intestinal Neuro Gastro Intestinal Anti-Infectives Cardiac Cardiac Cardiac 5.4 4.3 5.6 4.5 1.8 1.8 1.8 1.3 1.2 1.3 6.8 6.2 5.4 4.0 2.8 2.2 1.7 1.4 1.3 0.8 -20 -30 4 14 -35 -21 10 -1 -10 65

(| crore)
5.6 5.4 6.7 4.4 2.4 2.3 1.7 1.5 1.3 1.4 -4 -20 -15 2 -25 -23 5 -11 -9 -4

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%)

Unichem Laboratories

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 79: Contribution of therapies to domestic sales (MAT Aug’13)
Pain 3% Gastro Intestinal 11% Other 11%

Exhibit 80: Therapy wise performance
Therapy Cardiac Anti-Infectives Neuro Aug '13 25.9 11.4 6.6 7.1 2.1 1.8 1.3 1.2 0.8 0.4 Aug'12 29.0 10.5 6.9 7.4 2.1 2.1 1.9 1.3 1.1 0.2 YoY (%) -11 8 -6 -4 -1 -12 -30 -7 -33 67 Jul'13 28.0 12.6 7.0 7.5 2.2 1.7 1.4 1.3 0.8 0.5

(| crore)
QoQ (%) -7 -9 -7 -5 -4 7 -5 -5 -2 -20

Cardiac 47%

Gastro Intestinal Pain Anti Diabetic Respiratory Vitamins

Neuro 12% Anti-Infectives 16%

Derma Gynaecological

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 21

-6.5 Aug-13

Sep-12

Oct-12

Jan-13

Mar-13

Apr-13

May-13

Dec-12

Feb-13

8%

0

1.0

1.1

5

8.1

4.1

4.6

49%

5.6

10%

7.4 9.1

10

8.7 11.1

9.3

9.4

Acute : Chronic contribution (MAT Aug’13)
Chronic, 38.7, 7% Acute, 523.5, 93%

Indoco Remedies

Stock Performance
150 115 80 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Indoco Jul-13 Sep-13

BSE Healthcare

Source: NSE, ICICIdirect.com Research

Exhibit 81: Company growth vis-à-vis Indian pharma market growth Brands contribution to domestic sales (MAT Aug’13)
13% 9%

20
12.5

16.4

9.8

(%)

7.4

10
5.2

5.6

8.7

9.3

4.1

Nov-12

Jan-13

Feb-13 -2.7

0
Oct-12 Sep-12 Aug-12
16% Top 10 11 to 20 21 to 30 31 to 50 Others

-1.8

Jul-13

May-13

-5

Indian Pharma Market

Indoco Remedies

Source: AIOCD database

Source: AIOCD database, ICICIdirect.com Research

Exhibit 82: Market share in Indian formulations market
0.84 0.82 0.80 0.80 0.78 0.75 0.76 0.77 0.77 0.76 0.77 0.75 0.72 0.82 0.80 0.80

Exhibit 83: Top 10 brands performance
Brand Febrex Plus Cyclopam Sensodent-K Atm Cital Oxipod
Jun-13 Jul-13

(| crore)
6.1 5.5 2.6 2.6 1.8 2.0 1.5 1.7 1.8 1.2 6 -2 2 -26 8 11 4 11 -12 16 6.3 6.3 2.8 2.3 1.8 2.1 1.8 1.9 1.7 1.4 3 -14 -7 -17 12 5 -12 2 -6 -2

Therapy Respiratory Gastro Intestinal Stomatologicals Anti-Infectives Gynaecological Anti-Infectives Stomatologicals Derma Anti-Infectives Stomatologicals

Aug'13 Aug'12 Var. (%) Jul'13 Var. (%) 6.5 5.5 2.6 1.9 2.0 2.2 1.6 1.9 1.6 1.4

(%)

0.78 0.76 0.74 0.72

Nov-12

Oct-12

Sep-12

Dec-12

Jan-13

Feb-13

Mar-13

May-13

Aug-12

Jul-12

Apr-13

Sensoform Cloben G Vepan Sensodent-Kf

Indoco Remedies

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

Exhibit 84: Contribution of therapies to domestic sales (MAT Aug’13)
Other 27% Respiratory 21%

Exhibit 85: Therapy wise performance
Therapy Respiratory Anti-Infectives Stomatologicals Gastro Intestinal Aug '13 10.7 8.6 7.6 7.6 2.5 2.3 2.4 2.1 2.5 1.9 Aug'12 10.5 9.4 7.0 7.7 2.4 2.5 2.2 2.0 2.3 1.7 YoY (%) 2 -9 9 -1 6 -9 7 4 10 7 Jul'13 10.2 8.9 8.1 8.6 2.3 2.4 2.4 2.1 2.3 1.9

(| crore)
QoQ (%) 5 -4 -6 -11 11 -5 -1 -1 7 -4

Gynaecological 5%

Anti-Infectives 18% Gastro Intestinal 14% Stomatological s 15%

Gynaecological Ophthal / Otologicals Pain / Analgesics Vitamins / Minerals / N Derma Anti Diabetic

Source: AIOCD database, ICICIdirect.com Research

Source: AIOCD database, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 22

Aug-13

Mar-13

Dec-12

Apr-13

Jun-13 0.0

1.1 0.8

55%

3.6

2.7

2.7

2.7

-0.5

7%

5

4.1

8.7

4.6

9.4

12.0

15

13.3

18.8

ICICIdirect.com coverage universe (Pharma & Hospitals)
Company Apollo Hospitals Aurobindo Pharma Biocon Cadila Healthcare Cipla Divi's Laboratories Glenmark Pharma Indoco Remedies Ipca Laboratories Jubilant Life Sciences Lupin Natco Pharma Opto Circuits Strides Arcolab Sun Pharma Torrent Pharma Unichem Laboratories I-Direct Code APOHOS AURPHA BIOCON CADHEA CIPLA DIVLAB GLEPHA INDREM IPCLAB VAMORG LUPIN NATPHA OPTCIR STRARC SUNPHA TORPHA UNILAB CMP TP (|) (|) 865 209 344 680 440 571 67 704 84 895 614 21 877 605 438 172 Rating M Cap (| Cr) 12,108 6,122 6,919 13,999 35,519 14,008 15,552 623 8,932 1,344 40,344 1,938 520 5,213 125,936 7,460 1,563 EPS (|) PE(x) EV/EBITDA (x) RoCE (%) RoNW (%) FY13E FY14E FY15E FY13E FY14E FY15E FY13E FY14E FY15E FY13E FY14E FY15E FY13E FY14E FY15E 21.9 10.1 25.4 32.0 19.2 45.5 22.7 4.6 25.6 9.6 29.3 22.9 15.7 44.4 14.5 25.6 12.5 24.0 19.6 20.3 37.0 19.6 54.1 26.8 7.0 35.9 15.2 35.8 32.2 NA NA 9.6 30.7 18.0 31.6 28.9 24.3 50.1 23.5 62.7 33.5 8.8 45.2 31.5 41.5 60.9 NA NA 22.2 33.3 16.7 39.6 20.7 13.5 21.2 22.9 23.0 25.1 14.5 27.4 8.8 30.5 24.5 2.0 19.7 41.6 17.1 13.7 36.1 10.7 16.9 18.4 22.4 19.4 21.3 9.6 19.6 5.5 25.0 17.4 NA NA 63.2 14.3 9.5 27.4 7.2 14.2 13.6 18.7 16.7 17.0 7.6 15.6 2.7 21.6 9.2 NA NA 27.2 13.2 10.3 20.7 10.5 12.1 13.4 15.6 16.7 17.5 8.0 15.2 4.6 18.1 15.0 3.8 12.0 24.3 10.8 9.0 17.3 7.3 9.8 12.4 14.9 13.9 14.3 6.3 13.6 4.6 15.1 12.3 NA NA 20.5 9.4 7.9 13.6 6.0 8.2 9.2 12.2 11.3 11.9 5.4 10.6 3.4 12.3 7.3 NA NA 19.1 8.1 6.5 11.7 10.6 13.6 19.2 18.7 28.4 18.8 13.2 24.7 12.1 30.1 14.7 14.2 12.2 34.3 28.8 18.0 13.5 15.4 16.4 17.2 16.8 27.8 23.2 15.2 24.1 11.9 31.0 16.5 NA NA 37.4 28.4 17.8 17.2 17.1 17.5 22.1 19.2 28.5 25.4 16.1 26.4 14.3 31.4 24.2 NA NA 31.3 29.0 19.5 11.1 11.3 18.9 24.6 17.1 23.9 22.5 10.3 20.8 6.1 25.3 13.5 19.9 43.5 21.3 30.4 15.6 11.3 18.4 13.7 23.8 15.2 23.9 24.2 13.9 23.3 9.1 24.4 16.3 NA NA 13.1 30.2 19.5 13.4 21.8 14.8 26.7 15.6 23.5 24.8 15.2 23.3 16.3 22.8 24.2 NA NA 24.3 27.5 16.2 930 HOLD 211 BUY 315 HOLD 852 BUY 470 HOLD 603 HOLD 71 BUY 723 HOLD 131 BUY 833 HOLD 716 BUY NA UR NA UR 533 HOLD 466 BUY 200 BUY

1049 1191 BUY

Exhibit 86: One year forward P/E of BSE Healthcare Index vs. Sensex
35 30 25 20 x 15 10 5 0 Mar-06 Mar-09 Mar-12 Dec-09 Dec-06 Dec-12 Sep-10 Sep-07 Jun-08 Jun-11 Sensex 38% premium

BSE Healthcare Index
[

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd. | Retail Equity Research

Page 23

RATING RATIONALE

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Add, Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Sector view: Over weight compared to index Equal weight compared to index Under weight compared to index Index here refers to BSE 500

Pankaj Pandey

Head – Research ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No. 7, MIDC, Andheri (East) Mumbai – 400 093 research@icicidirect.com

pankaj.pandey@icicisecurities.com

ANALYST CERTIFICATION
We /I, Siddhant Khandekar CA-INTER Krishna Kiran Konduri MBA FINANCE research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.

Disclosures:
ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading underwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection processes. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. 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ICICI Securities and affiliates expect to receive compensation from the companies mentioned in the report within a period of three months following the date of publication of the research report for services in respect of public offerings, corporate finance, investment banking or other advisory services in a merger or specific transaction. It is confirmed that Siddhant Khandekar CA-INTER Krishna Kiran Konduri MBA FINANCE research analysts and the authors of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Our research professionals are paid in part based on the profitability of ICICI Securities, which include earnings from Investment Banking and other business. ICICI Securities or its subsidiaries collectively do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. 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ICICI Securities Ltd. | Retail Equity Research

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