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ICRA in its latest report has said that revenues of Indian pharma companies are likely to expand by 9-11 per cent in the current financial year (FY25), albeit a moderation from the increase of 13-14 per cent recorded in the previous year. It stated this projected revenue will be driven by 9-11 per cent growth from the US market, 7-9 per cent each from the European and domestic markets, and 11-13 per cent from the emerging markets.

ICRA has maintained its Stable outlook for the Indian pharmaceutical industry, led by steady demand in the export and domestic markets and the comfortable credit profile of key industry participants. Kinjal Shah, Senior Vice President and Co-Group Head – Corporate Ratings, ICRA, said, ‘ICRA expects the operating margins of its sample set of companies to remain stable at 23-24 per cent in FY2025, supported by an increase in revenues, higher contribution of complex generics/ specialty molecules and soft prices of raw materials.’

It asserted growth in the previous fiscal was impacted to an extent by the change in the composition of the National List of Essential Medicines (NLEM), which resulted in a decline in realisations for certain drugs, in addition to an uneven monsoon, which affected acute therapy sales. The overall growth for pharma companies is expected to be supported by sales force expansion and improvement in productivity of medical representatives (MR), widening distribution in rural areas, and new product launches, even though the price hike granted under NLEM for 2024-25 is minimal. Moreover, it said the revenue growth from the domestic market is set to improve by 7-9% in FY25 as against 6.4% in FY24.