Macquarie sees potential upside in Indian pharma and CDMO stocks
Macquarie is optimistic about Indian pharma and CDMO companies, predicting significant upside potential due to recent market corrections and global supply chain shifts. Indian CDMOs are favored for their cost-effectiveness and regulatory complianc...
By ET Bureau | Updated:
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The brokerage has an 'underperform' rating on Apollo Hospitals and Max Healthcare, and sees 19% and 47% downside, respectively.
Mumbai: Brokerage Macquarie has said that it is constructive on Indian pharma and CDMO (contract development and manufacturing organisation) companies, while it remains cautious on hospitals. The brokerage sees 7-49% upside in the pharma and CDMO shares.
Macquarie's analysts said that the recent correction in pharma companies offers a good entry point for investors.
"Tariffs on Indian pharma are impractical and hence, correction is an opportunity," said the note. "CDMO companies are well placed to benefit from global supply chain reorganisation."
Macquarie said Indian CDMOs are preferred for small molecules due to cost competitiveness (50-60% lower than Western counterparts), regulatory compliance and chemistry expertise.
They are cautious about Indian hospitals, citing an upcoming capacity deluge. The brokerage has an 'underperform' rating on Apollo Hospitals and Max Healthcare, and sees 19% and 47% downside, respectively.
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