New Delhi [India], 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.
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