India’s pharmaceutical industry is expected to grow steadily in the first quarter of the financial year 2025-26 (Q1FY26). A report by Kotak Institutional Equities says that pharma companies are likely to see an 11% increase in both sales and EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to the same period last year.
This growth is mainly due to strong demand in both domestic and international markets. However, the report also notes that weak demand in March and April in India might slightly reduce the overall gains.
Hospitals Leading the Growth
The hospital sector is expected to grow even faster than the overall pharma industry. The report predicts a 17% rise in both revenue and EBITDA for hospitals. This is because of more patients visiting hospitals, the addition of new beds, and a small rise in income per patient.
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Diagnostics Segment Also Performing Well
The diagnostics sector is also doing well, with a 14% increase in sales expected. This is driven by better types of tests being done, more people getting tested, and recent mergers and acquisitions in the industry.
India’s Pharma Market Snapshot
- In FY24, India’s pharmaceutical market was valued at $50 billion.
- Of this, $26.5 billion came from exports, and the domestic market was worth $23.5 billion.
- Globally, India ranks 3rd in production volume and 14th in value.
- India produces a wide range of products including generic medicines, over-the-counter drugs, vaccines, biologics, and biosimilars.
Employment and Economic Contribution
- According to government data, the pharma sector contributed Rs 4.56 lakh crore in output in FY23.
- It added Rs 1.75 lakh crore in value and employed around 9.26 lakh people during the year.
Government Support for R&D and Education
The government is actively supporting research and development (R&D) in the pharma sector:
- Seven National Institutes of Pharmaceutical Education & Research (NIPERs) have been set up to provide advanced training and support industry-focused research.
- A new National Policy on Research & Development and Innovation in the Pharma-MedTech Sector has also been introduced.
- This policy aims to build a strong R&D environment, encourage new businesses, and help India become a global leader in drug and medical device innovation.
Positive Outlook
With strong government support, high-quality research institutions, and growing global demand, India’s pharma industry is set for continued growth across all sectors.
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