Indian Pharma Industry Poised for 9-11% Revenue Growth in FY25: ICRA Report

New Delhi, Oct 1 (KNN) Indian pharmaceutical companies are projected to experience a 9-11 per cent revenue growth in FY25, according to a report by credit rating agency ICRA.

While this marks a solid performance, it represents a slight moderation from the 13-14 per cent year-on-year (Y-o-Y) increase seen in FY24, which was driven by higher demand and an influx of new product launches.

The United States market, a key driver of growth, is expected to remain the largest contributor to this revenue boost. In FY24, Indian pharma companies saw an impressive 18.3 per cent rise in revenue from the US, spurred by factors such as the launch of new products, faster regulatory approvals, and pricing benefits stemming from supply chain disruptions.

However, Icra warns that these favourable conditions may not be as sustainable in FY25.

The domestic market is poised for a positive turnaround, with Icra projecting a 7-9 per cent revenue growth for its sample companies in FY25.

This follows a more modest 6.4 per cent growth in FY24, which was hampered by changes in the National List of Essential Medicines (NLEM) and an uneven monsoon season.

In FY25, Indian pharmaceutical companies are expected to leverage better sales strategies, wider rural distribution, and product launches to drive growth, despite limited price hikes under the updated NLEM guidelines.

Similarly, the European market is forecast to show a 7-9 per cent revenue increase in FY25, following robust growth of 15.3 per cent in FY24. However, the high base from the previous year is likely to temper the growth momentum.

Emerging markets are expected to perform strongly, with anticipated revenue growth of 11-13 per cent, continuing their momentum from FY24.

Icra maintains a stable outlook for the Indian pharmaceutical sector, citing steady demand in both domestic and export markets. Strong internal cash reserves, a healthy credit profile, and manageable debt levels ensure that the industry remains financially sound, even as companies invest in capacity expansion and research & development (R&D).

R&D spending is expected to remain at 6.5-7 per cent of revenue, with a focus on complex molecules and specialty products, signalling a shift away from generics.

Strategic acquisitions by leading companies to expand market share and diversify therapeutic offerings are expected to support future growth and long-term sustainability.

(KNN Bureau)