Research Report

The Indian pharmaceutical industry has remained relatively unaffected so far by the ongoing conflict in West Asia as the region generates only around 2% of the total sales (domestic + exports) of Indian pharmaceutical companies and 7% of total imports. However, a prolonged conflict resulting in sustained high freight and solvent costs, thereby increasing the input costs, might pose some downside risk to the profitability of Indian pharmaceutical companies.

• ICRA forecasts the revenues of its sample set of Indian pharmaceutical companies1 to grow by 9- 11% in FY2026 and 6-8% in FY2027, after increasing by around 10% in FY2025. Moderation in revenue growth in FY2027 is to be largely driven by lower growth in the US market.
• Domestic market (29% of total FY2025 revenue): Revenue growth of ICRA’s sample set of companies in the domestic market is expected to be 8-10% in both FY2026 and FY2027. In 9M FY2026, revenues grew by 8.6% on the back of market share gains for some players in chronic therapies, volume expansion and continued benefits from new product introductions. While growth in Q2 FY2026 was partly impacted by the implementation of the Goods & Services Tax (GST) 2.0, as some distributors recalibrated purchases, growth improved in Q3 FY2026 to 12.6% on a year-over-year (YoY) basis.

Trend in revenues and OPM*

Source: Company data, ICRA Research; *Based on a sample set of 25 listed Indian pharmaceutical companies