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Informist, Thursday, Sept. 24, 2026

MUMBAI – Though sales of the Indian pharmaceutical industry are seen growing 11-13% on year this fiscal year, high raw material, energy and freight costs are expected to weigh down operating margins by 150-200 basis points, Crisil Ratings Ltd. said. India's pharmaceutical sector had posted an 8% revenue growth in the financial year 2025-26 (Apr-Mar). While the industry's exports are estimated to rise 14-16% in rupee terms, a 9-11% rise in domestic sales has been pencilled in for FY27.

However, despite cost pressures, the credit profiles of companies in the sector have strong cash generation, liquidity, and balance sheets. Further, accelerating exports and firmer domestic demand are also key positives. The pharmaceutical sector earns almost equal revenue from the domestic and export markets, Crisil said in a report. Formulations make up 83% of the sector's exports and, of these, around 57% are shipped to regulated markets, according to the report. 

In the US, differentiated product launches and inventory normalisation should help offset pricing pressure, Sehul Bhatt, the director of Crisil Intelligence, said in the report. Meanwhile, branded generics and new launches across Asia, Africa, and Latin America are expected to propel growth, he said. 

For the domestic pharmaceutical market, chronic therapies are expected to drive sales due to a rise in lifestyle-linked illnesses. Annual price revisions of 5-6% and a recovery in volume growth to 4-5% in FY27, compared with 2% in FY26 and FY25, are also expected to support the sector's growth. 

"The improvement in volumes will be driven by new product launches, stronger prescription demand, improving field-force productivity and deeper penetration into tier-2 and tier-3 markets," Crisil said. Going forward, freight and input costs, any potential US tariffs on pharmaceutical exports, and unresolved regulatory issues will be key to track.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ruchira Kagita

Edited by Himanshi Gupta

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