Pharma Industry Forecast FY25: Insights on Revenue Growth and Market Dynamics

Pharmaceutical Sector Growth in FY25

The pharmaceutical sector growth is anticipated to reach 10% in FY25, largely attributed to improved exports in regulated markets, recovery in semi-regulated markets, and consistent domestic demand in pharmaceuticals. According to a comprehensive report by CRISIL, the industry is set to grow 8-10% over the previous fiscal.

Profit Margins in Indian Pharma

With the overall operational margins expected to increase by 70-80 basis points, reaching 22.5% profit, pharmaceutical companies are noticing less pressure in the US generics market to reduce prices. As Aditya Jhaver of CRISIL Ratings indicates, strong cash flowslead organizations to pursue inorganic growth opportunities within the APIs and formulation segments.

Factors Driving Growth

• New Product Launches: The launch of novel products will fuel volume growth, aiming for a 7-9% increase in domestic revenue.
• Chronic Disease Focus: The lucrative market for chronic diseases, such as diabetes and hypertension, will significantly contribute to revenue generation.
• Cash Flow Stability: A solid financial health profile, coupled with an efficient working capital cycle, assures continued cash flow for pharma companies.

Revenue Distribution Insights

Analysis of 190 drug makers reveals that half of the 4.1 lakh crore market enjoys a balanced revenue source from domestic and export sales. Pharma exports consist of 80% formulations and 20% drugs, with notable growth in formulation exports expected at 12-14%.

Conclusion on Future Growth

Financial health remains strong as companies prepare for acquisitions in various medical sectors. With consistent revenue distribution between domestic sales and exports, the Indian pharmaceutical market analysis highlights a promising outlook for sustained growth.