Indian Pharma Sector Eyes Growth Amid Challenges

The Indian pharmaceutical industry is anticipated to grow steadily, driven by domestic demand and expanding CDMO/API segments, despite US market pressures. A report predicts 10% revenue growth in Q1 FY27, fueled by the GLP-1 and complex generics segments. Notable is rising input costs affecting profitability.

The Indian pharmaceutical sector is poised for robust growth in the upcoming quarters, driven by persistent local demand and a resurgence in the Contract Development and Manufacturing Organization (CDMO) and Active Pharmaceutical Ingredient (API) segments. These insights were revealed in a report by 360 ONE Capital, despite challenges like a struggling US market and rising input costs.

The brokerage firm forecasts a 10% year-on-year revenue growth in the first quarter of Fiscal Year 2027, primarily bolstered by 12.7% growth in domestic markets and 9.9% in the CDMO/API segments. Nonetheless, the US market is projected to face a 9.3% decline, attributed to a significant base effect from Revlimid-related sales.

Dr. Reddy's Laboratories' discontinuation of generic semaglutide injections, due to API quality issues, has heightened uncertainties in the GLP-1 therapy space. Yet, the report highlights that CRAMS/API players are expected to thrive structurally, with US-oriented companies potentially recovering as business conditions stabilize.