11% rise in revenues in Indian Pharma Industry owing to domestic and US markets, says Sharekhan Report

A surge in the demand for novel products to treat chronic diseases is predicted to cause an 11% rise in revenues in the Indian pharma industry. 

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As per the Sharekhan Report published in Business Today, the Indian pharmaceutical sector is anticipated to witness robust growth in the current fiscal year, thanks to the dynamic domestic and US expansion fueled by introducing new products and a diversified product portfolio. Sharekhan, a financial services firm, has predicted an 11% year-on-year (YoY) revenue surge to Rs 60,202 crore. Additionally, a 24% increase in EBITDA to Rs 14,971 crore, with PAT expected to rise by 43% to Rs 9,174 crore across the industry is predicted as well.

Because of the robust product mix and optimisation of raw material costs, EBITDA margins for pharmaceutical companies are expected to elevate by 252 basis points YoY to 24.9%. The domestic segment of the industry is forecasted to expand by 10% to Rs 14,908 crore.

Sharekhan predicts a 12% YoY growth in the US market, reaching Rs 17,451 crore, driven by introducing new products. The top performers in the large-cap category include Sun Pharma, Dr Reddy's, and Cipla. The mid-cap companies leading the hospital stocks include Sanofi, Strides Pharma, Caplin Point, and Artemis Medicare.

The heightened demand for novel products to treat chronic diseases is expected to increase pharmaceutical sales in the final quarter of 2024 by 11.4% YoY. Sharekhan predicts a 10% YoY growth in the Indian market and a 12% growth in the US market, primarily attributed to the release of complex pharmaceutical products.

Despite existing challenges, such as research and development expenditures and inspections by the United States Food and Drug Administration (USFDA), Indian pharmaceutical companies are firmly positioned to capitalise on growth opportunities, owing to their global competitiveness and significant market share.

Looking ahead, Sharekhan envisions a sustained performance by the industry, supported by an 8-10% growth in the domestic branded business and an emphasis on introducing complex pharmaceutical products. Furthermore, an increase in investments in research and development is expected to drive medium and long-term growth, with emerging opportunities stemming from factors like rising Loss of Exclusivity (LOE) prospects, a growing preference for speciality and complex generics, and potential benefits from the "China+1" strategy in the Active Pharmaceutical Ingredients (API) sector.