Global pharma grows, Bajaj Healthcare rises as key contender

The global pharmaceutical industry is expected to witness steady growth with a projected compound annual growth rate ranging from 4% to 6% over the next 5 years . This growth is expected to result in an impressive market size of approximately $1.9 trillion but will not be evenly distributed across regions. Established markets may experience moderate growth, while emerging markets in Eastern Europe, Asia, and Latin America are expected to see substantial growth in both volume and spending. Oncology sector is expected to be a frontrunner, projected to experience the fastest growth with a CAGR of 13% to 16% until 2027. On the other hand, the Immunology segment is forecasted to grow at a slower pace with a CAGR of 3% to 6%. These disparities underscore the dynamic nature of the medicine market, revealing diverse growth opportunities depending on the region and the specific therapeutic area. The U.S. medicine market is the largest globally at invoice prices and is projected to experience a growth of USD 134 billion, reaching USD 763 billion over the next five years . This anticipated growth will be primarily driven by an increased uptake of existing and newly launched branded medicines. On the other hand , the Chinese market is anticipated to experience substantial expansion with estimates suggesting it will reach USD 194 billion by 2027 . Japan is the third largest global market and medicine spending is expected to remain relatively stable at around USD 75 billion due to increasing expenditure on protected innovator drugs . As for Europe, the combined medical spending in the top five countries like France, Germany, Italy, Spain, and U.K. is projected to reach USD 263 billion over the next five years. Similar to the U.S., the growth in these markets will be primarily driven by protected branded drugs, while generics and biosimilars will also play a role in contributing to the overall growth.

Bajaj Healthcare Ltd has been a low key Pharma player but is coming out of its slumber and making its presence felt in the pharmaceutical market . The company commenced its business of bulk drug manufacturing in the year 1993 from

a single unit in Tarapur , Maharashtra. Since then it has metamorphosed into a Specialty company focusing on development, manufacturing and supply of Amino acids , Nutritional supplements and Active Pharmaceutical ingredients for the Food , Nutraceutical and the pharmaceutical industry . The Bajaj Healthcare shares got listed on the stock exchanges in 2016 and is today the world’s largest manufacturer of Chlorhexidine base and the country’s largest manufacturer of Ascorbic acids having nine manufacturing facilities spread across the country . Even though the company faced many tough challenges in FY 23 , it has continued to deepen its business strengthening initiatives concentrating on realigning and reimagining the business strategy to ensure sustainability. Going back to the drawing board and re looking at its business strategy to adapt to the ever changing market and recent shifts in consumer behaviour and technological advancements demanded a fresh approach . The Indian pharmaceutical industry which is currently valued at around US$50 billion is expected to experience solid growth over the next decade, reaching US$130 billion by 2030 at a commendable CAGR of 12.3%. This rapid expansion will propel it to become the world’s third-largest in terms of volume and the 11th largest in terms of spending. The future outlook of Bajaj Healthcare Ltd is extremely bright with many positives happening for the company during the last one year . It has successfully completed the USFDA inspection of its API facility in Gujarat and launched many new molecules in the nutraceutical, API and formulation segments . Plus reduced its dependence on China for raw materials by developing them in house . It has also got permission for processing Alkaloids from opium gum and poppy straw from the government, being the first private sector player in the country to get this coveted approval. Fund managers and analysts have been recommending the Bajaj Healthcare stock for long term gains on expectations of brighter financial results over the next one year time frame .
The stock was quoting at its high of Rs 465 in Jan 2023 and has regained that position of the same price this month having halved during the interim period . Analysts expect a decent price appreciation on the Bajaj Healthcare stock currently quoting at Rs 465 on the Indian bourses .