market research report : pharmacy retail market in india 2013

Pharmacy Retail Market IndiaPharmacy Retail Market ‐ India

May 2013

Executive Summary

Market

• The Indian pharmacy retail market is valued at approximately INR X1 bn and is expected to reach INR X5 bn by 20‐‐

• The market is distinctly fragmented into organized and unorganized players with a major share of the market being dominated by the unorganized sector

Drivers & Challenges

Drivers Growth in Pharmaceuticals Sector Rising Healthcare Expenditure Changing Disease Profile Growth in OTC Segment

Challenges Capital Intensive Business Fragmented Industry Counterfeit Drugs

Challenges Growth in OTC Segment Consumer Attitude Attractive Margins

Loyalty SchemesValue Added Services

Organized Retailers Starting Pharmacy Chains

Trends

Value Added ServicesHealth Insurance Plans Made Available in Pharmacy Tele Consultation Service Entry of Government in Pharmacy R t ili

Entry of Private LabelsRural Expansion Tracking of Counterfeit Drug

Competitive Landscape

Retailing

Key Players

Company A Company B Company C

2

Landscape Company A Company B Company C

Company D Company E Company F

PHARMACY RETAIL MARKET IN INDIA 2013.PPT

•Macro Economic Indicators

•Introduction•Introduction

•Market Overview

•Government Regulationsg

•Drivers & Challenges

•Industry Association

•Key Trends

•Technology Adoption

•Competitive Landscape

•Strategic Insights

3PHARMACY RETAIL MARKET IN INDIA 2013.PPT

•Appendix

SAMPLE Economic Indicators (1/3)

INR tn

15 13.9514.12

GDP at Factor Cost: Quarterly

13.4012.62

11.66

13.0612.2911.5210.70

13.1612.39

11.47

10.58

14

13

12

11

13.24

12.13

Q2Q1

10

Q4Q32012‐132011‐122010‐112009‐10

Inflation Rate: Monthlyy

0.910.93

0 8

1.0

%

0.460.460.47

0.2

0.4

0.6

0.8


0.0

Dec 2012 ‐ Jan 2013Nov 2012 ‐ Dec 2012Oct 2012 ‐ Nov 2012Sep 2012 ‐ Oct 2012Aug 2012 ‐ Sep 2012

Pharmacy retail serves direct consumer requirements of drugs for consumption purpose

The concept of direct selling of drugs is known as Pharmacy Retailing as well as Community Pharmacy

• Issue of bills that ensures the authenticity of

Pharmacy Chain Retailing Traditional Medical Retailing

• No practice of providing bills that affects level of• Issue of bills that ensures the authenticity of medicines offered

Bill Issue • No practice of providing bills that affects level of assurance of medicine offered at stores

• Traditional medical retailing hardly gives• Employment of licensed pharmacists and retail chain is generally associated with trained doctors

• Can provide reliable advice to customers as well as benefit of doctor‐endorsed substitution

Pharmacists Employment

• Traditional medical retailing hardly gives importance to employment of licensed pharmacists

• Lack of association with doctors often results in self substitution in the absence of prescribed medicine

Working Capital

• Has enough working capital to keep enough stock of medicineAl ff 24 h i

medicine

• Limited finance restricts the stock of medicine• IT infrastructure investment is a far fetched


g p• Also offers 24 hrs service• Can invest in IT

affair

Unorganized segment of pharmaceutical market dominates a large volume of the pharmaceutical retail market

• Indian pharmacy retail stands out as a lucrative market that still remains under penetrated, projecting strong potentialTh I di h k i k d 13th i f

Market Overview

2,000X% X6

INR bn

Market Size and Growth

• The Indian pharmacy market is ranked 13th in terms of value and 4th in terms of volume

• The pharmaceutical sector on the whole contributes a share of 2‐3% to India’s GDP

• The market is distinctly fragmented into organized and d l

500

1,000

1,500 X5X4

X3X2X1

unorganized players There are approximately P to Q stores across the country There are N key players operating in the organized segment of pharmacy retail

• The unorganized market is huge and is approximately l d t INR it i % f th t t l k t

0

20‐‐20‐‐20‐‐20‐‐20‐‐20‐‐

Market Segmentationvalued at INR xUnounits occupying a% of the total market size while organized market is valued at approximately INR XO units capturing close to b% of market share The unorganized pharmacy retail market is growing at a CAGR of m% while organized pharmacy retail is expected to grow at a CAGR of n% 80%

100%

%

O6%O5%O4%O3%O2%O1%

Organized Unorganized

There will emerge a significant change in the market segmentation by 20‐‐ when organized retail will capture approximately p% market from the current q% share

• In India, pharmacies are the dominant distribution channel generating approximately s% of the overall pharmaceutical sales 0%

20%

40%

60%

UO6%UO5%UO4%UO3%UO2%UO1%


pharmaceutical sales 0%

20‐‐20‐‐20‐‐20‐‐20‐‐20‐‐

Government Role: Summary

Licence Procurement

Role of

Government

Foreign Direct I

Ownership RestrictionsInvestment

Ownership Restrictions


Drivers & Challenges

Drivers

Growth in Pharmaceuticals Sector Challenges

Rising Healthcare Expenditure

Changing Disease Profile

Capital Intensive Business

Fragmented Industry

Growth in OTC Segment

Consumer Attitude

Counterfeit Drugs

Attractive Margins


SAMPLETechnology Adoption: Summary

SAMPLE Customer Relationship

ManagementManagement

TechnologyT dTrends

Supply Chain M

Enterprise Resource l iManagement Planning


Competitive Benchmarking (1/3)

Key Ratios of Major 3 Companies – Operational Basis (FY 20‐‐) (1/3)

7.292 8410

% Net MarginOperating Margin

‐2.73 ‐2.09

2.84

‐30

‐20

‐10

0

10

‐32.57 ‐32.92‐40

30

Company CCompany BCompany A

• Emami Frank Ross Ltd. recorded operating margin of 7.29%, higher than both MedPlus Health Services Pvt. Ltd. and Religare Wellness Ltd. which recorded operating margin ‐2.73% and ‐32.57% respectively

• Only Emami Frank Ross Ltd. recorded positive net margin of 2.84% while both MedPlus Health Services Pvt. Ltd. and Religare Wellness Ltd. recorded negative net margin, of ‐2.09% and ‐32.92% respectively


Public: Domestic Company – Player A (1/4)

Offices and Centres – India Company Information

Corporate Address xx

Tel No. xx

Fax No. xx

Website xx

Year of Incorporation xx

Ti k S b lTicker Symbol xx

Stock Exchange xx

Products and Services

Mumbai

Key People

Name Designation

Category Products/Services

Domestic Appliances xx

Head Office

Lighting Products xx


SAMPLE i i l S h K i

Public: Domestic Company – Player A (2/4)

Financial Snapshot Key Ratios

Net Profit / LossTotal Income

27,565.740,000 1,500

INR unitsINR units

31,123.322,379.4

Particulars y‐o‐y change (2012‐11)

2012 2011 2010 2009

Profitability RatiosOperating Margin ‐1.37 7.36% 8.73% 10.20% 10.15%

0

20,000

0

500

1,000

20‐‐20‐‐20‐‐20‐‐

17,755.6 Net Margin ‐1.43 3.79% 5.22% 5.23% 5.02%

Profit Before Tax Margin ‐2.28 5.65% 7.93% 8.94% 7.87%

Return on Equity ‐6.69 16.84% 23.53% 23.69% 36.38%

Return on Capital Employed ‐5.65 30.15% 35.80% 41.23% 55.25%

Return on Working Capital ‐6.19 99.01% 105.20% 56.56% 95.34%

Return on Assets ‐1.89 11.74% 13.63% 16.90% 17.31%

Financial Summary

• The company earned a net profit of INR 1,178.8 mn in FY 2012, as compared to net profit of INR 1,437.9 mn in FY 2011

• The company reported total income of INR 31,123.3 mn in FY 2012 registering an increase of 12 9 per cent over FY 2011

Return on Fixed Assets ‐35.06 122.51% 157.57% 226.85% 185.65%

Cost RatiosOperating costs (% of Sales) 1.39 92.61% 91.22% 89.76% 89.81%

Administration costs (% of Sales)

1.22 13.04% 11.82% 12.36% 12.06%

Interest costs (% of Sales) 0.61 1.92% 1.32% 1.66% 2.33%2012, registering an increase of 12.9 per cent over FY 2011

• The company earned an operating margin of 7.36 per cent in FY 2012 a decrease of 1.37 percentage points over FY 2011

• The company reported debt to equity ratio of 0.30 in FY 2012, an increase of 36.04 per cent over FY 2011

(% )

Liquidity RatiosCurrent Ratio ‐1.25% 1.19 1.21 1.51 1.26

Cash Ratio 5.17% 0.08 0.08 0.12 0.12

Leverage RatiosDebt to Equity Ratio 36.04% 0.30 0.22 0.31 0.88

D b C i l R i

Indicators Value (21/01/2013)Market Capitalization (INR) xxTotal Enterprise Value (INR) xxEPS (INR)

Key Financial Performance Indicators Debt to Capital Ratio 27.74% 0.23 0.18 0.23 0.47

Interest Coverage Ratio ‐42.39% 3.84 6.67 6.16 4.37

Efficiency RatiosFixed Asset Turnover ‐7.66% 16.57 17.95 22.15 18.22

Asset Turnover 2.28% 1.59 1.55 1.65 1.70

Current Asset Turnover 5.04% 2.18 2.07 1.86 1.96

12

EPS (INR) xxPE Ratio (Absolute)‐09/01/2013 xx

Improved Decline

Working Capital Turnover 11.77% 13.39 11.98 5.52 9.36

Capital Employed Turnover ‐7.31% 3.41 3.68 3.45 3.84

PHARMACY RETAIL MARKET IN INDIA 2013.PPT

SAMPLE Public: Domestic Company – Player A – SWOT Analysis (4/4)

• xx• xx

S WS W

TO• xx

• xx


Thank you for the attentionThe Pharmacy Retail Market – India report is part of Research on India’s Healthcare Series.For more detailed information or customized research requirements please contact:

Phone: +91 33 4027 6214/6215

Follow us on:

Phone: +91 33 4027 6214/6215E‐Mail: [email protected]

About NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & g g f g p y p p fbusiness research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.

Disclaimer: This report is published for general information only Although high standards have been used in the preparation “Netscribes” is


Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, Netscribes is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction.

https://www.facebook.com/researchonindia

https://twitter.com/ResearchOnIndia

http://www.linkedin.com/groups?gid=3280715&trk=hb_side_g

market research report : pharmacy retail market in india 2013

Documents