CRISIL Predicts Indian Pharma Sales To Rise 7%-9% In FY23

Due to challenges in export sales in the regulated markets and a large base effect in the home formulations sector, the Indian pharmaceutical industry is anticipated to achieve moderate revenue growth of 7-9% in the current fiscal.

Because of ongoing pricing pressure in the US generics market, high input and freight costs, which offset moderate revenue growth, and operating profitability declining by another 200–250 basis points (bps) after a 130 bps decline in the previous fiscal, it was predicted.

The rating agency’s projections are based on data from 184 drug manufacturers, who together generate 55% of the industry’s annual revenue of Rs. 3.4 lakh crore.

According to CRISIL, the Indian formulations market is anticipated to expand by 7-9% this fiscal year, up from 15% growth last year. This growth will be driven by new product releases and a 6-8% average price rise approved by the National Pharmaceutical Pricing Authority in March 2022.

While demand for COVID-19-induced medications and vitamins is waning, it was also noted that this fiscal year’s demand is likely to be driven by a rise in the use of some chronic medications related to lifestyle, as well as a few acute medications, particularly in the dermatology and ophthalmology segments.

Given ongoing price pressure, according to CRISIL Research Director Aniket Dani, the expansion of the US generics market will slow.

However, some blushes are spared by the decline of the rupee. Exports to other controlled markets could expand more quickly as multinational corporations geographically broaden, he added.