India's Growing OTC Drug Market to Reach INR XX Billion by 20

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OTC Drug Market - India
July 2014

2
Drivers:
 Rising consumer confidence in OTC
products
 Switch of prescription drugs to OTC
widens growth opportunity of OTC
 Increasing focus on brand building
 Booming retail growth
 Changing demographics
 Lower price control
Challenges:
Low penetration in rural areas
Preference of home remedies
Competitive market
Time consuming clinical trial procedures
Competition
Drivers and
Challenges
Market
Executive Summary
 India currently ranks eleventh in the global Over-the-counter (OTC) drug market
 OTC drug market in India is valued at INR XX unit in 20--
 The market is expected to grow at a CAGR of m% from 20-- to 20--
Public Players Private Players
Player 1; Player 2; Player 3; Player 4; Player 5; Player
6; Player 7; Player 8; Player 9; Player 10; Player11
Payer 1; player 2; Player 3; Player 4
OTC DRUG MARKET IN INDIA 2014.PPT

3
•Macroeconomic Indicators
•Introduction
•Market Overview
•Market Value Chain
•Drivers & Challenges
•Government Initiatives
•Regulations
•Competitive Landscape
•Recent Developments
•Strategic Recommendations
•Appendix

4
Economic Indicators (1/3)
11
12
13
14
15
INR tn
Q4
c4
b4
a4
Q3
c3
b3
a3
Q2
d2
c2
b2
a2
Q1
d1
c1
b1
a1
2013-142012-132011-122010-11
GDP at Factor Cost: Quarterly
Inflation Rate: Monthly
-2
-1
0
1
2
q
Aug 2013 - Sep 2013
r
Sep 2013 - Oct 2013Jul 2013 - Aug 2013
p
Nov 2013 - Dec 2013
t
Oct 2013 - Nov 2013
%
s

5
Global OTC drug market is expected to witness a huge
growth over the coming years
• OTC pharmaceutical is one of the largest segments of
the overall pharma market
• The market has a size of INR A1 unit in 20-- and is
expected to grow at a CAGR of m % from 20-- to 20--
• Cough and cold medicines are the leading contributor in
the global market, comprising almost p% of the total
market
• Major growth is expected to come from the Asia-Pacific
region, which is the largest contributor to global sales
and accounts for q% of the global market
• In 20--,pharmacy retail chains formed the major share of
the distribution channel in the global OTC pharma
market, accounting for r% of the total value
• A large number of drugs are shifting from prescription
to OTC, thus drives the market extensively
Global Market – Overview Market Size and Growth
OTC Drug Distribution – 20--
A%
C%
B%
C
B
A
0
2
4
6
8
INR XX
M%
20--e
A6
20--e
A5
20--e
A4
20--e
A3
20--
A2
20--
A1
Note: Revenue fluctuations caused due to the changes in exchange rate

6
Increasing amount of consumer confidence in OTC products
is driving the Indian market
• Over-the-counter drug market in India has a huge
potential
• Indian OTC market had a size of INR X bn in 20-- and
is expected to grow at a CAGR of y% from 20-- to 20--
• India currently ranks eleventh in the global OTC
market and it is estimated that it will reach ninth
position within next five years
• Sales channels for OTC drugs are extensive, as they
do not require a drug license and can be sold by non
chemists as well
• Vitamins and minerals segments are the most
popular segments, with a share of around Y%
Indian Market – Overview Market Size and Growth
Source:
OTC Drug Distribution – 20--
0
50
100
150
200
INR YY
y%
20--e
X6
20--e
X5
20--e
X4
20--e
X3
20--
X2
20--
X1
D4%
D3%
D2%
D1%
D4
D3
D2
D1

7
Drivers & Challenges – Summary
Drivers
Rising consumer confidence in OTC
products
Switch of prescription drugs to OTC
widens growth opportunity of OTC
Booming retail growth
Increasing focus on brand building
Changing demographics
Low price control
Challenges
Low penetration in rural areas
Preference of home remedies
Competitive market
Time consuming clinical trial
procedures

8
Government Initiatives – Summary
Government
Initiatives
Reduction in drug prices
Other Initiatives Changes in tax structure

9
SAMPLEPorter’s Five Forces Analysis
Competitive Rivalry
• Texttext texttext texttext texttext
texttext texttext texttext
Bargaining Power of Buyers
• Texttext texttext texttext
texttext
• Texttext texttext texttext
texttext
Threat of New Entrants
Impact
Low to
Medium
Impact
Medium to
High
Impact
High
Bargaining Power of Suppliers
Impact
Low to
Medium
Threat of Substitutes
Impact
Low

10
SAMPLECompetitive Benchmarking (1/5)
Public Trading Comparables (FY 2013) – Top 3 Companies
Company A Company B Company C
Market Capitalization (INR mn) Value
Value Value
Share Price (INR) Value Value Value
EV/EBITDA (INR mn) Value Value Value
EV/Revenue (INR mn) Value Value Value
PE Ratio Value Value Value
Note: Top 3 Public companies based on the Market Capitalization, Share Price and PE ratio is as of 18/05/2014

11
SAMPLEKey Ratios of Top 3 Companies – Operational Basis (FY 20--) (1/3)
Competitive Benchmarking (1/4)
-30
-20
-10
0
10
%
Player C
q3
Player B
q2p2
Player A
q1p1
Net MarginOperating Margin
• X
• X

12
Public: Domestic Company – Company A (1/4)
Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Company A
Address Line 1
Address Line 2
Tel No. +91 xx xxxxxxxx
Fax No. +91 xx xxxxxxxx
Website www.a.com
Year of Incorporation 19--
Ticker Symbol xxx
Stock Exchange NNN
Name Designation
Person A Chairman, M.D.
Person B GM of Finance
Person c President- OTC Division
Person D Senior V.P. Sales & Marketing
X
Head Office
Category Products/Services
Healthcare
Management
Nutritional drinks, pharmaceuticals,
OTC
F&B Drinks and cola

13
Key Ratios
Financial Summary
• The company earned a net profit of INR q units in FY 20--, as
compared to net profit of INR r units in FY 20--
• The company reported total income of INR p units in FY 20--,
registering an increase of t per cent over FY 20--
• The company earned an operating margin of f per cent in FY 20--, a
decrease of g percentage points over FY 20--
• The company reported debt to equity ratio of h in FY 20--, an
increase of z per cent over FY 20--
Key Financial Performance Indicators
Net Profit / Loss
Total Income
-20
0
20
INR units
-40
INR units
2.0
1.5
1.0
0.5
0.0
20--
q
p
20--
r
o
20--
s
n
20--
t
m
Indicators Value (dd/mm/20--)
Market Capitalization (INR)
Total Enterprise Value (INR)
Particulars
y-o-y change
(20-- - --)
20-- 20-- 20-- 20--
Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
Return on Working Capital
Return on Assets
Return on Fixed Assets
Cost Ratios
Operating costs (% of Sales)
Administration costs (% of
Sales)
Interest costs (% of Sales)
Liquidity Ratios
Current Ratio
Cash Ratio
Leverage Ratios
Debt to Equity Ratio
Debt to Capital Ratio
Interest Coverage Ratio
Efficiency Ratios
Fixed Asset Turnover
Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Improved Decline
Financial Snapshot

14
Key Business Segments Key Geographic Segments
Business Highlights
20--
z y
x
20--
z y
x
20--
z y
x
20--
z y
x
zyx
0
20
40
60
80
100
20--
100% A
Company A has been solely
operating in India
Description News
Overview
• Company A is an integrated research based company that produces a wide range of generic medicines
• Serves customers in over 100 countries with manufacturing facilities in several countries
OTC • Has been operating in the OTC industry for the past 12 years
Key Initiatives
• Is making consistent effort for continual improvement in rural areas with respect to accessibility of
medicines

15
Product Category OTC Products
Pain Management Product A, Product B
Congestion
Management
Product C, Product D
Healthcare
Management
Product E, Product F
OTC Products

16
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India's Growing OTC Drug Market to Reach INR XX Billion by 20

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