Healthcare as a theme has grown well beyond pharma manufacturing, with many exciting growth verticals like CDMO, hospitals, diagnostics, medical insurance and pharma distribution. This theme will see a lot of migration from small to midcaps and mid to large caps over the rest of this decade.
PGIM India’s new Healthcare Fund aims to identify such bottom up opportunities to create wealth for its investors.
CDMO in particular can be transformational over next few years – just as IT services and more recently the GCC wave have been. As leading Chinese players get eased out due to US regulations, good quality Indian CDMO companies can look for very rapid scaling up in the years ahead.
Medical insurance penetration is driving growth not only for insurers but also good quality hospitals which now become more accessible through insurance coverage.
Pharma distribution is yet largely unorganized, but is rapidly changing with a few leading national and regional chains taking over chemist outlets. While the listed space currently has only a couple of such businesses, expect more to get listed down the road.
Within pharma manufacturing, domestic branded formulations is a steady growth business with a long runway ahead while US generics exports has become a more volatile commoditized play.