Business

Indian Pharma Sector Poised for 10% Growth in FY26, ICICI Securities Report Forecasts

India’s pharmaceutical industry is on track to expand at a robust pace of around 10?percent in fiscal year 2026, fueled by strategic price adjustments and a steady stream of new product rollouts, according to the latest analysis from ICICI Securities.

• By Newsdesk
• New Delhi
• Jun 12, 2025

Business

India’s pharmaceutical industry is on track to expand at a robust pace of around 10 percent in fiscal year 2026, fueled by strategic price adjustments and a steady stream of new product rollouts, according to the latest analysis from ICICI Securities.

The brokerage noted that the industry’s overall revenue momentum has been underpinned by strong demand in Rest of the World (RoW) markets. “India business is likely to grow at a steady pace of approximately 10 percent in FY26, driven by price increases and new launches,” the report stated. By contrast, growth in the sector’s two core markets—the United States and India domestic—was more modest, with respective expansions of 6.5 percent and 10.2 percent.

In the United States, profit pressures loom large, particularly around generic competition for Revlimid. According to ICICI Securities, heightened price rivalry in this segment could weigh on earnings in the year ahead. Meanwhile, India-focused companies are expected to benefit from resilient local demand and a strong pipeline of innovative therapies.

Contract Development and Manufacturing Organisations (CDMOs) with an export orientation also displayed healthy traction, the report highlighted. Among firms under ICICI Securities’ coverage, revenue climbed 11.2 percent, EBITDA rose 12.6 percent, and profit after tax surged 15.2 percent over the past year.

Fourth-quarter FY25 results underscored this positive trend. Covered pharma companies delivered double‑digit growth across the board: revenues rose by 11.7 percent, EBITDA by 15.6 percent, and PAT by 19.0 percent year‑on‑year. Gross margins remained largely stable at 67 percent, dipping marginally by 10 basis points, while EBITDA margins improved by 82 basis points to 24.9 percent, reflecting effective cost containment and operating leverage.

Research and development intensity remained high, with aggregate R&D spend at 6.7 percent of sales in Q4FY25—slightly below last year’s 7.2 percent but up from 6.5 percent in the preceding quarter. Overall, ICICI Securities reiterated its confidence in the Indian pharmaceutical landscape, emphasizing the sector’s domestic resilience and the promise of fresh product launches as key growth drivers in FY26.