Indian pharmaceutical industry to grow at 6-8% in FY2024 despite disruptive events, says ICRA

Despite several disruptive events, the Indian pharmaceutical industry is projected to grow by 6-8 percent in FY2024, compared to 3-4 percent in FY2023, according to rating agency ICRA on Thursday.
Structural factors such as an aging population and an increase in lifestyle/chronic diseases, as well as WPI-linked price hikes for NLEM products, new product introductions, and annual price hikes for non-NLEM products, are expected to support revenue growth for the industry, according to Icra Assistant Vice President & Sector Head – Corporate Ratings Mythri Macherla.

The Indian pharmaceutical market (IPM) grew at a healthy 10.9 percent CAGR between FY2012 and FY2022, according to the study.

Since FY2018, she said, IPM growth has been primarily supported by price increases and new product introductions, even as volume growth has stayed between 2-3% per fiscal year.

Macherla stated that higher anti-infective sales, aided by price increases to offset raw material cost inflation, aided the total IPM growth of 14.6% in FY2022. However, given the elevated starting point, volume contracted by 1.2% for the first nine months of FY2023.

According to reports, drugs on the National List of Essential Medicines (NLEM) account for 17-18% of the IPM, with some companies deriving up to 30% of their income from such medications.

According to ICRA, e-pharmacies have gained considerable traction in recent years and now account for 10-15% of the IPM.