Digital Adoption Drives 9-11% Revenue Growth in Pharma for FY25-FY26

In the pharmaceutical industry, a revenue growth of 9-11 percent is expected for FY25 and FY26, supported by digital transformation, increased internet availability, and broader expansion in Tier-I and Tier-II cities. The top local brokerage has assembled a selection of the five best stocks in the pharmaceutical/healthcare sector that could capitalize on the industry's substantial growth potential.

The Indian pharmaceutical sector is expected to expand by 9-11 per cent in 2025-26 (FY26), driven by price increases, new local product launches, and heightened export demand from regulated markets. The government's production-linked incentive (PLI) program for the pharmaceutical sector allows for 18-20 percent of imported medications to be produced domestically. Motilal Oswal Wealth Management indicates that analysts anticipate enhanced profitability for hospitals, driven by the introduction of beds, rising occupancy rates, and better revenue realization.

Mankind Pharma maintains a higher growth rate than the industry in the Rx-prescription sector, bolstered by a specialized portfolio and excellent performance in chronic treatments. Motilal Oswal noted that Lupin has demonstrated a recovery in earnings, fueled by the introduction of niche products within the US generics sector, better performance compared to the industry in the domestic formulation (DF) sector, and unique product launches in the EU/growth markets.