Pharma exports from India to overtake domestic sales by FY15
February 14, 2014: The pharma exports from India will be more than the size of the domestic sales by FY15, according a recent report by India Ratings & Research. While revising its outlook for the sector for next fiscal to positive from stable because of increased exports, the firm said that the domestic pharma market is expected to see high single digit revenue growth and profit margins are expected to improve because of increasing utilisation of manufacturing facilities.
Most of the domestic pharmaceutical companies carry at least a stable rating as most of the positive factors work in favour of the Indian companies. In fact, it is expected that the credit profiles of these companies will strengthen even further due to increasing revenue and improving margins on increased exports.
It may be noted here that the sector registered a strong export growth between 2007-08 and 2012-13, growing at compounded annual growth rate (CAGR) of 22 per cent. The sector is expected to continue growing on the same rate in the medium term.
With drugs worth US$ 92 billion going off patent in the next three years and on the back of rising acceptance for generic drugs globally, the Indian pharma sector is well poised to register strong growth in coming years.
Exports to the US market are expected to continue to grow in the medium term due to the large number of approvals from US Food & Drug Administration (USFDA). It is noteworthy that India has the largest number of USFDA approved facilities and the largest share of drug approvals over the last few years.
In addition, approvals from World Health Organisation and European regulators are expected to contribute significantly to the overall growth of the Indian pharmaceutical sector.