The Indian pharmaceutical market is very similar to China. Local companies hold a dominant position, with generics making around 80% of total sales. Prices are very low, driven by intense competition. India is the 10th largest market by value, but 3rd largest by volume. The industry is expected to grow at 15% per year till 2020, outpacing an expected 7-10% GDP growth rate. In addition, many investors have realized India offers a low-cost high-quality manufacturing base for global pharmaceutical majors, which has recently caused an acquisition spree by both domestic and foreign companies: Mylan acquisition of Strides Arcolab, merger of Elder Pharmaceuticals and Torrent Pharma, or Gland Pharma bought by KKR.
Alembic Pharma is a very solid company with a clear growth plan and bright future ahead. With P/S of 3, and P/E ratio 21, the stock is very reasonably priced and offers a low risk entry with a high potential profit.