Indian pharma exporters are likely to face growth pressure in semi-regulated markets such as Africa and Latin America, says India Ratings and Research.
Weak economic and political conditions in Africa and currency volatility in LATAM are likely to weigh on consumption of pharmaceutical formulations, impacting growth prospects over the medium term, the credit rating agency adds.
In FY17, India's exports of pharmaceutical formulations or finished products to the semi-regulated markets grew at the weakest pace of 0.7 pct in the last seven years, after exhibiting robust growth till FY14, Ind-Ra says.
The ratings agency attributes the underperformance in FY17 to a 7 pct y-o-y and 5.1 pct y-o-y decline in exports to Africa and LATAM, respectively.
Up to Monday's close, shares of major exporters such as Dr.Reddy's Laboratories Ltd and Sun Pharmaceutical Industries Ltd had fallen about 20 pct each this year, while Lupin Ltd dropped 33 pct.
The Nifty Pharma index has posted six losses on month so far this year versus two losses on month for the broader NSE index.
