Active pharmaceutical ingredients sector likely to exhibit stable financial performance in FY26: Ind-Ra
Rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the active pharmaceutical ingredients (API) sector is likely to continue exhibiting a stable financial performance in FY26, despite the pricing pressures, given the large portfolio basket, geographical diversification and a shift to complex, high-margin molecules, aided by benign raw material cost.
According to the report, Indian API companies continued to witness volume growth in 1QFY26, albeit at lower pricing in regulated markets (US, Europe, Japan etc.), with continued pricing pressure in domestic and Rest of World (ROW) markets. It noted that additional capacities under the Production-linked Incentive (PLI) scheme and increasing imports have contributed to the pricing pressure.
Besides, Ind-Ra has observed lower raw material prices and cost improvement initiatives led to over a 100bp improvement in gross margins/EBITDA margins during 1QFY26 compared to FY25 (average). The rating agency further said that pricing challenges are expected to persist in the near term, with growth likely to be driven by domestic volumes in 2HFY26.
