Indian Pharma Sector To Record 8 to 10 Percent Revenue Growth This Fiscal says Crisil

The Indian pharmaceuticals industry is expected to log in a revenue growth of 8-10 per cent in current fiscal aided by a steady domestic growth and increased exports to regulated markets, even as semi-regulated markets face headwinds. A study of 186 drug makers, which accounted for about half of the Rs 3.7 lakh crore annual revenue of the sector last fiscal, indicates as much, Crisil said. "Similar to last fiscal, domestic growth in fiscal 2024, will be led by 5-6 per cent increase in realisations, supported partly by high price hikes allowed by the National Pharmaceutical Pricing Authority (NPPA) for drugs under price regulation," Crisil Research Director Aniket Dani said.

In addition, sale of existing drugs and new launches will drive 3-4 per cent volume growth, he added. Operating profitability is also seen improving 50-100 basis points (bps) to 21 per cent this fiscal, supported by moderation in input and logistics costs, and abating pricing pressure in the US generics market, it said. This follows two consecutive years of margin contraction due to high pricing pressure in the US and a sharp rise in input costs caused by supply chain disruption during the Covid pandemic, and thereafter, Crisil noted. Credit profiles will remain stable owing to low-leverage balance sheets and moderate capex plans, it stated. In the ongoing fiscal, domestic sales are expected to witness 8-10 per cent growth with the chronic segment expected to be the key contributor to revenues, because of the steady increase in lifestyle-related diseases and continued emphasis on health awareness, post the pandemic, Crisil said.