Key Points

In the last fiscal year, the revenue growth of the pharma was 10 per cent. Stable input costs and focus on product launches will help offset the rising cost of compliance and reduced exports of high-margin products to regulated markets, the report from Crisil Intelligence said.

Further, the domestic revenue is also expected to rise 7-9 per cent this fiscal, driven by higher realisations due to annual price hikes and higher volumes due to product launches.

The study found that revenue is nearly evenly divided between domestic sales and exports. Formulations make up about 83 per cent of exports, while bulk drugs account for the rest, the report said.

The research firm said that 59 per cent of formulation exports are directed to regulated markets, with the US as the leading destination.

“Formulation exports to regulated markets should grow 9-11 per cent this fiscal, slower than 14 per cent in the past two, largely on account of a high base," said Aniket Dani, Director, Crisil Intelligence.

New product launches and US drug shortages are expected to boost exports. However, semi-regulated markets are projected to grow more slowly, at approximately 5-7 per cent, due to sharp currency depreciation in some countries and recurring quality concerns, he added.

Crisil Ratings Director Aditya Jhaver said that the replacement risk for Indian generics in the US remains low, as the manufacturing capacities in the country are limited, and India continues to fulfill over 40 per cent of generic prescriptions.

The government, in the recently implemented GST cuts, exempted lifesaving and cancer medicines while reducing rates on various other drugs from 12 per cent to 5 per cent. These changes are anticipated to make essential therapies more affordable.

- IANS