Pharma Sector Shining in the Midst of Coronavirus

Coronavirus has impacted the global Economy, due to which the domestic equity faced a huge decline. Most stocks have been hit low records. The BSE Sensex and NSE Nifty had their worst run since the 2nd week of March. On 18th March, Sensex ended at 28,896 points by falling 1709 points while Nifty failed below 8500 points.

Pharma, the safe haven for Investors

In the midst of the mayhem, the pharma sector looks less affected as it is profiting handsomely. Investors hunting for safe havens in the ongoing turmoil can consider Investing in the pharma sector as it is showing an improving trend in Earnings.

In recent years, the pharmaceutical sector has augmented as the new listing of hospitals and diagnostic companies have been added more to the basket. The government policies and rising Income levels are giving robust growth in this sector.

The pharmaceutical sector was valued at US$33 billion in 2017. In 2018, the Indian pharmaceutical exports stood at US$17.27 billion and reached US$19.14 billion in 2019. The pharmaceutical Industry is anticipated to expand at a CAGR of 22.4% by 2020.

Indian companies received 304 Abbreviated New Drug Application from the US Food and Drug Administration in 2017. The pharma sector will expand and will reach US$55 billion by 2025.

The pharmaceuticals exports bulk drugs, intermediates, drug formulations, biologicals, herbal products and so on. India’s biotechnology industry compromising bio-agriculture, bio-industry, bio-pharmaceuticals and so on is expected to grow at the moderate rate of around 30% a year and it is expected to reach US$ 100 billion in the coming years.

Factors for Investing in Pharma Sector

The pharma sector provides several opportunities for investments and trade due to the following factors:

• India’s huge population is an excellent centre for clinical trials.
• India has cost-effective sources for getting a hold for generic drugs, especially the drugs that are going off their patents in the coming years.
• India has excellent laboratories with world-class facilities. The laboratories specialize in the development of cost-efficient drug Manufacturing technology.
• The country is self-sufficient for the production of bulk drugs. Almost 70% of the requirements for the formulation of drugs is available in India.
• The Indian pharmaceutical industry is attracting foreign investors, which is increasing the trade balance in the pharma sector
• The country is a fast-growing biotech industry, it offers potential in the international Market. Also, it has made the pharma sector an attractive industry to make investments.

Best Pharma Sector Funds to Invest in India 2025

Conclusion

Medical spending in India has projected to grow 9-12 per cent over the next five years. Further, the growth in domestic sales may increase because of coronavirus. To add more, in such a volatile phase, there are a few Mutual Funds that are performing well.

Speedy introduction of generic or new drugs into the market are in focus and it has expected to benefit the Indian Pharmaceutical companies.