New Delhi: 12 June — India’s pharmaceutical sector is projected to grow steadily at around 10% in FY26, driven by price hikes and a robust pipeline of new product launches, according to a report by ICICI Securities.
The report highlighted that growth will primarily be supported by the Rest of the World (RoW) markets, even as the core markets of the United States and India posted slower expansion rates of 6.5% and 10.2% respectively.
“The India business is likely to grow at a steady pace of approximately 10% in FY26, driven by price increases and new launches,” the report stated.
However, concerns persist in the U.S. market, where generic Revlimid (gRevlimid) faces intense pricing pressure, potentially weighing on earnings in the coming year.
Despite this, companies under ICICI Securities’ coverage posted a strong performance in Q4FY25, reporting:
- 11.7% revenue growth
- 15.6% EBITDA growth
- 19.0% rise in Profit After Tax (PAT)
While gross margins dipped slightly by 10 basis points year-on-year and quarter-on-quarter to settle at around 67%, EBITDA margin improved by 82 basis points year-on-year to 24.9%, aided by operating leverage and cost control. There was a marginal decline of 12 basis points quarter-on-quarter.
Contract Development and Manufacturing Organisation (CDMO) firms with export orientation also showed healthy momentum during the period.
On the innovation front, R&D spending stood at 6.7% of sales in Q4FY25—lower than 7.2% in the same quarter last year but slightly above Q3FY25’s 6.5%.
Overall, ICICI Securities remains bullish on the sector’s outlook in FY26, citing domestic market resilience and strong new product pipelines as key growth enablers.
