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Key Points

The Indian pharmaceutical sector is projected to grow by 10% in FY26, according to ICICI Securities. Growth will be fueled by price increases and new product launches, particularly in domestic and RoW markets. However, the US market faces uncertainty due to generic Revlimid competition. Strong EBITDA margins and cost controls further support the optimistic outlook for the industry.

Key Points: Indian Pharma Industry to Grow 10% in FY26 Says ICICI Report

  • RoW markets drive revenue growth
  • US faces uncertainty due to gRevlimid competition
  • EBITDA margins improve to 24.9% in Q4FY25
  • Domestic resilience and new launches boost outlook
2 min read

Indian Pharma Industry is likely to grow at a steady pace of 10% in FY26: Report

ICICI Securities forecasts 10% growth for India's pharma sector in FY26 driven by price hikes and new product launches, despite US market challenges.

"India biz is likely to grow at a steady pace of approx. 10% in FY26, driven by price increases and new launches – ICICI Securities"

New Delhi, June 12

Pharmaceutical companies in India are expected to grow steadily at a rate of approximately 10 per cent in FY26, driven by price increases and the launch of new products, according to a report by ICICI Securities.

The report noted that the revenue growth for the industry was mainly supported by the Rest of the World (RoW) markets.

It said "India biz is likely to grow at a steady pace of approx. 10 per cent in FY26, driven by price increases and new launches".

In contrast, the report stated that the core markets of the United States and India saw a slower pace of growth, recording 6.5 per cent and 10.2 per cent respectively.

The performance in the U.S. market remains uncertain, especially due to the looming price competition around generic Revlimid (gRevlimid), which could become a major drag on earnings in the coming year.

The report added that export-oriented CDMO (Contract Development and Manufacturing Organisation) companies also showed healthy traction.

The report mentioned that companies under coverage delivered a robust performance, reporting 11.2 per cent growth in revenue, 12.6 per cent growth in EBITDA, and 15.2 per cent growth in PAT (Profit After Tax).

In Q4FY25, the pharma companies covered in the report posted strong results, with revenue, EBITDA, and PAT growing by 11.7 per cent, 15.6 per cent, and 19.0 per cent respectively. Gross margin saw a slight dip of 10 basis points both year-on-year and quarter-on-quarter, settling at around 67 per cent.

However, the EBITDA margin improved by 82 basis points year-on-year to reach 24.9 per cent, although it declined slightly by 12 basis points on a quarterly basis. This margin expansion was supported by operating leverage and cost control measures.

The report also highlighted that the aggregate R&D spending of these companies stood at 6.7 per cent of sales in Q4FY25. This was lower compared to 7.2 per cent in Q4FY24, but slightly higher than 6.5 per cent reported in Q3FY25.

Overall, ICICI Securities remains optimistic about the Indian pharma sector's performance in FY26, especially supported by domestic market resilience and a strong pipeline of new launches.

- ANI

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Reader Comments

R
Rahul K.
Great news for our pharma sector! 🇮🇳 India is truly becoming the pharmacy of the world. The 10% growth projection shows our domestic market strength while we continue expanding globally. Just hope the quality standards remain uncompromised with this rapid growth.
P
Priya M.
While the numbers look impressive, I'm concerned about the slight dip in R&D spending. Innovation should be our priority if we want to compete globally long-term. More focus on novel drugs rather than just generics would be better for sustainable growth.
A
Amit S.
The US market uncertainty is worrying. Our pharma companies should diversify more into African and Latin American markets where there's huge potential. Also, government should provide more incentives for API manufacturing to reduce China dependence.
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Sunita P.
As someone whose family works in pharma, this growth is creating good jobs! But companies must ensure fair wages for all employees, not just top management benefiting from these profits. The 19% PAT growth should trickle down to workers too.
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Vikram J.
The CDMO segment showing healthy traction is excellent news! India should position itself as the global hub for contract manufacturing. Our cost advantage + skilled workforce can beat China if we play our cards right. Make in India working well in pharma! 💊
N
Neha R.
Hope this growth translates to more affordable medicines for common people. Sometimes pharma companies increase prices unnecessarily citing 'market conditions'. Government should monitor this closely to prevent exploitation of patients.

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