Revenue of 25 leading domestic pharmaceutical companies is expected to grow 9-11 per cent in the current fiscal year, as per Icra.
The projected revenue growth in 2023-24 will be primarily supported by 11-13 per cent expansion in the US market and 7-9 per cent growth in the domestic market, while revenues from the European market and emerging markets are expected to rise 11-13 per cent and 13-15 per cent, 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 per cent of the overall revenues of the Indian pharmaceutical industry) to expand by 9-11 per cent in FY24, post a year-on-year growth of 10 per cent in FY23," it noted.
Icra said it foresees research and development expenses for its sample set of companies to stabilise at 6.5-7 per cent of their revenues as they will optimise spending, focusing more on complex molecules and specialty products against plain vanilla generics.
The US 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 US market for Icra's sample set of companies declined to 35 per cent in FY22 as compared with 40 per cent 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 per cent in FY23 and 38 per cent in the first half of FY24, it added.