India's Pharma Industry Set for 19.4% YoY Earnings Growth in Q3 FY25

India's pharmaceutical industry is expected to show strong earnings growth of 19.4% year-over-year for the October-December quarter (Q3 FY25), fueled by solid domestic formulation (DF) sales, specialized US generic launches, and lower raw material expenses, as stated in a report by Motilal Oswal Financial Services.

Total sales for domestic pharmaceutical firms are anticipated to rise by 10% year-on-year to ?787 billion, while domestic formulation sales are projected to experience a 16.2% growth to ?209 billion. EBITDA, an important profitability metric, is anticipated to increase by 16.8% year-on-year to ?188 billion, whereas profit after tax (PAT) is projected to climb by 19.4% year-on-year to ?117 billion.

Motilal Oswal’s report pointed out that growth is fueled by increased domestic demand, a specialized product range in the US market, and cost savings from reduced raw material prices.

The expansion in the domestic market is mainly driven by therapies for cardiology, dermatology, urology, and anti-diabetic conditions, surpassing the 7% year-over-year growth rate of the Indian Pharmaceutical Market (IPM). Although cardiac, dermatology, and anti-diabetic treatments demonstrated significant growth, respiratory, anti-infective, and gynecological treatments saw moderate growth, which had a slight effect on the overall performance of the sector.

India’s pharmaceutical industry is poised for sustainable growth, supported by positive macroeconomic conditions, robust domestic demand, and enhanced financial inclusion. Thanks to policy backing, the introduction of innovative products, and cost efficiency, Indian pharmaceutical firms are poised to sustain their growth trajectory in the coming quarters.