Business

Pharma Sector Set to Clock 11% Growth in Sales and EBITDA in Q1FY26: Kotak Report

The report highlights that the hospital segment is expected to outpace the sector’s average performance, with a projected 17% YoY growth in both revenue and EBITDA. This surge is attributed to rising patient footfalls, the addition of new hospital beds, and a moderate increase in the Average Revenue Per Occupied Bed (ARPOB).

• By Newsdesk
• New Delhi
• Jul 06, 2025

Business

India’s pharmaceutical sector is poised for a healthy 11% year-on-year (YoY) growth in both sales and earnings before interest, taxes, depreciation, and amortisation (EBITDA) in the first quarter of FY26, according to a recent report by Kotak Institutional Equities. The upward trajectory is being driven by steady momentum across international and domestic markets, although some softness in domestic demand during March and April could slightly temper the overall gains.

The report highlights that the hospital segment is expected to outpace the sector’s average performance, with a projected 17% YoY growth in both revenue and EBITDA. This surge is attributed to rising patient footfalls, the addition of new hospital beds, and a moderate increase in the Average Revenue Per Occupied Bed (ARPOB).

In the diagnostics space, the outlook remains strong as well, with anticipated sales growth of 14% YoY. This is expected to be fuelled by increased test volumes, a richer service mix, and the positive impact of mergers and acquisitions within the segment.

India’s pharmaceutical industry continues to be a major player on the global stage. As of FY24, the market is valued at approximately USD 50 billion, comprising USD 23.5 billion in domestic consumption and USD 26.5 billion in exports. The country ranks third globally in terms of production volume and 14th in value, underlining its strategic importance in the global healthcare supply chain.

The sector boasts a highly diversified portfolio, ranging from generic and bulk drugs to over-the-counter medications, vaccines, biologics, and biosimilars. This breadth reinforces India’s reputation as a reliable and scalable pharma manufacturing hub.

As per the National Accounts Statistics 2024, released by the Ministry of Statistics and Programme Implementation, the total output from pharmaceuticals, medicinal, and botanical products was ₹4.56 lakh crore for FY23 at constant prices. Of this, the value added stood at ₹1.75 lakh crore, employing nearly 9.25 lakh people across the country.

Innovation remains a central pillar of India’s pharma growth story. The Department of Pharmaceuticals has taken major steps to enhance research capabilities by establishing seven National Institutes of Pharmaceutical Education and Research (NIPERs), recognized as institutes of national importance. These institutions not only offer advanced academic programs but also engage in cutting-edge research across various pharmaceutical disciplines.

Further strengthening the innovation ecosystem, the government has introduced a National Policy on Research & Development and Innovation in the Pharma-MedTech Sector. This policy aims to foster a robust entrepreneurial environment, encourage drug discovery, and support the development of next-generation medical technologies, thereby positioning India as a future leader in global pharmaceutical innovation.