Prospects intact, but enter with long horizon after runup

New fund offers of two health care-themed mutual funds the DSP Nifty Health care Index Fund and the Baroda BNP Paribas Health and Wellness Fund are currently open for subscription.

- HIMALI PATEL

The pharma and health care category has delivered a robust average return of 15.8 per cent over the past year.

Structural growth drivers Life expectancy has tripled over the past century, according to the World Bank. "The longer the lifespan, the greater the propensity to use medicines and allied services," says Sanjay Chawla, chief investment officer-equity, Baroda BNP Paribas Asset Management Company (AMC).

India's health care spend, at less than 4 per cent of GDP, lags behind countries such as Brazil, China, and South Africa, where it ranges between 7 and 9 per cent.

"Spending on health care is expected to grow faster than per capita GDP as India moves towards becoming a middleincome country," says Shibani Sircar Kurian, senior executive vice-president, senior fund manager and head-equity research, Kotak AMC.

Strong prospects across sub-segments Domestic sales dominate pharma companies' revenues.

The Indian branded pharma market generates around $27 billion in revenue.