Indian pharma companies: Revenue expected to grow 9-11 per cent in FY25

Business: Indian pharmaceutical companies’ revenue is expected to grow 9-11% in the current financial year (FY25), according to a report released on Monday. According to ICRA Credit Ratings, this growth will be driven by 9% to 11% growth in the US market, 7% to 9% growth in the European and domestic markets, and 11% to 13% growth in emerging markets. Sales growth in the domestic market is expected to grow to 7-9% in FY25 compared to 6.4% in FY24. Driven by stable demand in export and domestic markets and comfortable credit profiles of key industry players, ICRA maintains a stable outlook for the Indian pharmaceutical industry.

Kinjal Shah, senior vice-president and co-head of corporate ratings at ICRA, said she expects the operating margin of the sample companies to remain stable between 23 and 24 per cent in FY25 due to the high base of the previous year. However, it is still much higher than recent years. With lower pricing pressure in the US in FY24 and FY25 (YoY) due to supply constraints in the market, the Indian pharma industry also benefited from higher volumes and better pricing opportunities. “However, sustainability is yet to be seen this year. “Furthermore, regulatory risks associated with this market due to intense scrutiny by the USFDA are also important factors to monitor further,” Shah added.

” In the European market, pharmaceutical companies are expected to register 7-9% revenue growth in FY25, lower year-on-year due to base effects. According to the report, R&D costs are estimated to be between 6.5% and 7% of sales as the company optimises costs by focusing on complex molecules and specialty products rather than generics.