Pharma growth to moderate this fiscal

With Covid cases receding and exports slowing down, pharmaceutical revenues are expected to moderate to high single digit levels in the coming months and probably the entire fiscal.

“Indian pharmaceutical market growth is returning to normal levels as Covid cases have dropped and the monsoon season has ended. Barring any Covid- related upside, we expect the market to grow in mid-to-high teens for FY22, implying high single digit growth in the rest of the financial year,” said Kunal Dhamesh, analyst with Emkay Global Financial Services.

Crisil too expects the revenue growth of the pharmaceutical sector to moderate this fiscal. However, Crisil expects the entire fiscal to clock a growth of 9 per cent against a healthy 12.5 per cent growth last year.

The slower growth in pharmaceutical exports will lead to single digit growth this fiscal. Pharmaceu-ticals, which had driven the growth in exports during the pandemic year of FY21, witnessed a marginal decline of 0.9 per cent in October.

However, the sector will receive some support from Covid-19 vaccine opportunities and a pickup in demand in the domestic formulations market.

“With normalcy returning to healthcare delivery services, domestic formulations revenue, led by acute therapies, is estimated to grow 14-16 per cent this fiscal, compared with 2 per cent last fiscal. Further, with ramped-up capacities and improving pace of vaccination, Covid-19 vaccines also provide additional domestic growth potential this fiscal,” said Isha Chaudhary, director, Crisil Research.

Operating profitability too is likely to shrink this fiscal due to a sharp increase in input and other costs. The market grew 12 per cent in November and 10 per cent in October.