Pharma production expects to report 7-9% revenue gain in FY23

The domestic pharma industry is expected to report revenue profit growth of 7-9 % in the current fiscal, due to a blow in export sales in the regulated markets and a high-base effect in the domestic articulation business, as per rating agency CRISIL. The agency evaluation is based on a study of 184 drug makers accounting for 55% of the ₹3.4 lakh crore-a-year sector profit.

The operating profitability will decline another 200-250 basis points (bps) after the 130 bps decline last fiscal due to continued cost demand in the U.S. collective market, and high input and freight costs which equalize revenue profit growth, it said.

CRISIL stated that the domestic formulations market is expected to grow 7-9% in this fiscal, on a 15% growth last fiscal, led by a 6-8 % average price increase allowed by the National Pharmaceutical Pricing Authority in March 2022 and on the back of new product launches.

While the demand for Covid-19-caused drugs and vitamins is declining, a pickup in lifestyle-related chronic portfolio drugs and a few acute portfolio drugs, such as in the dermatology and ophthalmology segments, is likely to drive demand this fiscal, it added.

CRISIL Research Director Aniket Dani said the growth in the U.S. collective market will moderate given continued pricing pressure. “The rupee’s downturn saves some blushes, though. Exports to other control markets could grow faster as international companies increase globally,” he added.

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