Indian Pharma Companies Projected to Grow Revenues by 9-11% in FY25

Indian pharmaceutical companies are expected to achieve revenue growth of 9-11% in the current fiscal year (FY25), according to a report released on Monday.

This growth is anticipated to be driven by 9-11% revenue increases in the US market, 7-9% in both the European and domestic markets, and 11-13% in emerging markets, as reported by credit rating agency ICRA.

Revenue growth in the domestic market is projected to rise to 7-9% in FY25, up from 6.4% in FY24.

ICRA has maintained a stable outlook for the Indian pharmaceutical sector, citing consistent demand in both export and domestic markets, along with the solid credit profiles of major industry players.

Kinjal Shah, Senior Vice President and Co-Group Head of Corporate Ratings at ICRA, noted that operating margins for the sampled companies are expected to remain stable at 23-24% in FY25. This stability is attributed to increased revenues, a higher contribution from complex generics and specialty molecules, and favorable raw material pricing.

In the US market, revenue growth is expected to moderate to 9-11% in FY25 due to the high base set in the previous fiscal year, although this remains significantly higher than in recent years.

Indian pharmaceutical companies have also benefited from reduced pricing pressures in the US during FY24 and the current fiscal year, driven by supply-side constraints that have enabled volume growth and improved pricing opportunities.

“However, the sustainability of this trend remains uncertain, and regulatory risks in the US market are a key concern, especially given the increased scrutiny from the US FDA,” Shah cautioned.

In the European market, pharmaceutical companies are projected to see revenue growth of 7-9% in FY25, a moderation from the previous year due to the base effect.

Research and development expenses are expected to remain at 6.5-7% of revenues as companies optimize spending, focusing more on complex molecules and specialty products rather than generics, the report indicated.