According to a report, The Indian pharmaceuticals industry is expected to log in revenue growth of 8-10 per cent in the current Fiscal aided by steady domestic growth and increased exports to regulated markets, even as semi-regulated markets face headwinds.

Crisil said on Monday that 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.

“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, the 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 comes after the margin shrank for two years in a row as a result of intense pricing pressure in the US and a sharp increase in input costs brought on by supply chain disruption during the Covid epidemic, Crisil noted.

Credit profiles will remain stable owing to low-leverage balance sheets and moderate capex plans, it stated.

Crisil said that, 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.

Formulation exports are seen up 7-9 per cent in rupee terms this fiscal, more driven by volumes, from new product launches, and abating price pressure in the US generics markets, it said.

On the other hand, an increase in claw-back taxes in select European markets could lead to lower growth in exports to Europe this fiscal, it added.

“Growth in exports to Asia will improve this fiscal, after clocking a modest growth last fiscal, while exports to Africa will continue to remain sluggish on account of low forex reserves (impacting the purchasing power) and high currency volatility,” Crisil said.

Lower input prices and normalisation of supply chains should cull inventories to pre-pandemic levels, resulting in smaller incremental working capital debt this fiscal, it added. 

Few Listed pharmaceutical companies in India

• Cipla
• Dr Redyy’s Laboratories
• Sun Pharma
• Lupin Ltd
• Aurobindo Pharma

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