New Delhi
Indian pharmaceutical companies are projected to witness a healthy 9-11% revenue growth in FY25, according to a report by credit rating agency ICRA. This growth will be fueled by rising revenues across key markets, including a 9-11% boost from the US, 7-9% from Europe and domestic sales, and 11-13% from emerging markets.
Domestic revenue growth is expected to rise to 7-9% in FY25, up from 6.4% in FY24. ICRA has maintained a stable outlook for the Indian pharma industry, driven by strong demand both domestically and in export markets, as well as the solid financial position of major industry players.
Kinjal Shah, Senior Vice President and Co-Group Head of Corporate Ratings at ICRA, stated that operating margins for key companies are expected to remain stable at 23-24% in FY25. This will be supported by revenue growth, increasing contributions from complex generics and specialty products, and more favorable raw material costs.
In the US market, while revenue growth is predicted to slow to 9-11% due to a strong base in the previous fiscal year, it will still exceed recent years’ performance. The easing of pricing pressure in the US, along with supply constraints, has helped Indian firms achieve volume growth and better pricing.
However, the report highlights that regulatory risks, particularly scrutiny from the USFDA, will remain a key concern for Indian pharma companies. R&D spending is expected to stay at 6.5-7% of revenues, with a focus on developing complex molecules and specialty products over generics.
