India’s pharmaceutical and healthcare industries are expected to post steady revenue growth in the first quarter of FY26 (Q1FY26E). The report by HDFC Securities projects that pharmaceutical companies could see an 11% year-on-year (YoY) increase in revenue, mainly driven by a strong performance in the domestic market, which is also expected to grow by 11% YoY. However, sales in the US market are likely to see modest growth with 2% quarter-on-quarter (QoQ) and 2% YoY, helping to sustain overall momentum.
The report highlights a potential decline in EBITDA margins, a key indicator of operational profitability. Margins are expected to shrink by 42 basis points (bps) YoY, impacted by ongoing price erosion in the US generics market and a rise in research and development (R&D) spending.
EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortisation, serves as a measure of a company’s core operating performance. A decline in this metric signals that despite higher revenues, companies may face challenges in maintaining profitability.
On the healthcare front, the hospital segment is forecast to register a 15% YoY revenue increase. This growth is expected to be fueled by stable ARPOB (Average Revenue Per Occupied Bed), even as overall occupancy rates remain subdued. ARPOB is a benchmark used to assess financial performance in hospitals.
Rise of India’s Pharmaceutical Market
India’s pharmaceutical market reached a value of USD 50 billion in FY2023-24, with USD 23.5 billion generated from domestic sales and $26.5 billion from exports. In terms of global rankings, India holds the third position by volume and 14th by value in pharmaceutical production.
Key Contributor in GDP
Backing these industry trends, the National Accounts Statistics 2024, released by the Ministry of Statistics and Programme Implementation, reported that the total output from the pharmaceuticals, medicinal, and botanical products sector stood at Rs. 4,56,246 crore (at constant prices) for FY 2022–23. Of this, the value added, a key indicator of the sector’s contribution to GDP, was Rs.1,75,583 crore.
(With ANI Inputs)
Also Read: RBI Clarifies Lending Norms On Gold, Silver Collateral For Agri, MSME Loans
