Revenue of 25 leading domestic pharmaceutical companies is expected to grow 9-11% in the current fiscal year, as per ICRA.
The projected revenue growth in 2023-24 will be primarily supported by 11-13% expansion in the U.S. market and 7-9% growth in the domestic market, while revenues from the European market and emerging markets are expected to rise 11-13% and 13-15%, respectively, the rating agency said in a statement.
"ICRA expects the revenues of a sample set of 25 Indian pharmaceutical companies (which account for 60% of the overall revenues of the Indian pharmaceutical industry) to expand by 9-11% in FY24, post a year-on-year growth of 10% in FY23," it noted.
ICRA said it foresees research and development expenses for its sample set of companies to stabilise at 6.5-7% of their revenues as they will optimise spending, focusing more on complex molecules and specialty products against plain vanilla generics.
The U.S. has always been a key market for most leading Indian pharmaceutical companies, accounting for a sizeable share of their revenues.
However, the share of revenues from the U.S. market for ICRA's sample set of companies declined to 35% in FY22 as compared with 40% in FY20, owing to consistent pricing pressure, lack of major blockbuster products going off-patent and increased regulatory scrutiny in recent years, the rating agency said.
Nonetheless, with the easing of pricing pressure, significant new launches, and shortages of some products, the same increased to 37% in FY23 and 38% in the first half of FY24, it added.
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