Domestic pharma Demand on the Uprise, higher exports persist

The impending fiscal year unveils a promising trajectory marked by resilient domestic demand and formidable pharma exports to regulated markets.

This positive outlook is poised to be a substantial catalyst for revenue growth, particularly for small and medium enterprises (SMEs), which hold a substantial 35-40 percent stake in industry revenue.

The impending fiscal year unveils a promising trajectory marked by resilient domestic demand and formidable pharma exports to regulated markets.

SMEs, often specializing in formulations based on less complex molecules and exhibiting a higher exposure to generic products, are well-positioned for growth. Their strategic presence across the value chain, coupled with their role as contract manufacturers for larger players, positions them favorably in the market.

Notably, these entities witnessed a 7-9 percent growth in the last fiscal year, fueled by a considerable uptick in exports. The Ahmedabad and Mumbai SME clusters thrived on this export momentum, while heightened domestic demand propelled the Indore and Chennai clusters.

Looking ahead, the forecast for the current fiscal year projects a 9-11 percent growth for these entities, primarily driven by escalating domestic demand.

While export demand from semi-regulated markets has faced challenges due to currency volatility, low forex reserves, and geopolitical risks, the overall export scenario, constituting 50 percent of industry revenue, is expected to rebound.

An encouraging factor for the industry's medium-term prospects is the implementation of the Production Linked Incentive scheme for the pharmaceutical sector.

This initiative is anticipated to stimulate domestic manufacturing, simultaneously reducing import dependency on bulk drugs. SMEs stand to benefit from this scheme by diversifying their portfolios and enhancing export growth.

In November of the previous year, the domestic pharmaceutical market recorded a moderate 2.9 percent YoY growth, attributed to a high base and a slower increase in price and new launches.

Key therapies such as analgesics, anti-infectives, and respiratory therapies played a pivotal role in sustaining this growth.

As the pharmaceutical sector navigates the evolving landscape, it becomes evident that a blend of domestic resilience and strategic export recovery will be instrumental in driving sustained growth.mall and medium enterprises (SMEs), which hold a substantial 35-40 percent stake in industry revenue.

SMEs, often specializing in formulations based on less complex molecules and exhibiting a higher exposure to generic products, are well-positioned for growth. Their strategic presence across the value chain, coupled with their role as contract manufacturers for larger players, positions them favorably in the market.

Notably, these entities witnessed a 7-9 percent growth in the last fiscal year, fueled by a considerable uptick in exports. The Ahmedabad and Mumbai SME clusters thrived on this export momentum, while heightened domestic demand propelled the Indore and Chennai clusters.

Looking ahead, the forecast for the current fiscal year projects a 9-11 percent growth for these entities, primarily driven by escalating domestic demand.

While export demand from semi-regulated markets has faced challenges due to currency volatility, low forex reserves, and geopolitical risks, the overall export scenario, constituting 50 percent of industry revenue, is expected to rebound.

An encouraging factor for the industry's medium-term prospects is the implementation of the Production Linked Incentive scheme for the pharmaceutical sector.

This initiative is anticipated to stimulate domestic manufacturing, simultaneously reducing import dependency on bulk drugs. SMEs stand to benefit from this scheme by diversifying their portfolios and enhancing export growth.

In November of the previous year, the domestic pharmaceutical market recorded a moderate 2.9 percent YoY growth, attributed to a high base and a slower increase in price and new launches.

Key therapies such as analgesics, anti-infectives, and respiratory therapies played a pivotal role in sustaining this growth.

As the pharmaceutical sector navigates the evolving landscape, it becomes evident that a blend of domestic resilience and strategic export recovery will be instrumental in driving sustained growth.