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Indian pharma industry is likely to grow at 9-11% in FY26 : Motilal Oswal Wealth Management
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According to Motilal Oswal Wealth Management Ltd., the Indian pharma industry is likely to grow at 9-11% in FY26 (as per Crisil Report), led by price hike and new launches in domestic market and rise in export demand from regulated markets.
The Government of India has introduced PLI scheme for pharma industry to promote Make-in-India, wherein ~18-20% of imported drugs can be manufactured locally. For hospitals, we expect profitability to improve due to addition of beds, increase in occupancy, and improving realisation.
Motilal Oswal Wealth Management has curated a basket of five stocks from the Pharma/Healthcare space that can benefit from the strong growth potential in the industry.
* MANKIND: It continues to deliver a better growth rate than the industry in the Rx-prescription business, supported by a niche portfolio and superior execution in chronic therapies.
* Max: It’s combination of brownfield, greenfield and inorganic expansion will drive strong revenue growth and pave the way for quicker EBITDA breakeven for new beds, thus driving higher operating leverage benefits.
* Lupin: It has shown earnings turnaround, driven by addition of niche products in the US generics segment, industry outperformance in the domestic formulation (DF) segment, and differentiated product launches in the EU/growth markets.
* IPCA: It is working on multiple fronts to maintain its strong earnings momentum over the next 2-3 years. The momentum will be driven by: 1) relaunch of products in the US market, 2) new offerings through its own site as well as Unichem sites, c) outperforming the industry in DF/ROW markets, and d) building synergy between IPCA and Unichem’s operations.
* Piramal Pharma : With enhanced inquiries on the CDMO front at industry level in India, we believe Piramal Pharma is well poised to benefit from its differentiated capabilities and capacities. Further, it is increasing its offerings in the CHG segment through an established global network. Accordingly, we expect its PAT to scale up to INR7b by FY26 from INR560m in FY24.
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