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Pharma sector’s revenue likely to grow 11-13% in FY27 on strong exports, domestic demand: Crisil Ratings
Sep-25-2026

Crisil Ratings in its latest report has said that India's pharmaceutical sector revenue is likely to grow 11-13 per cent in the current fiscal year (FY27) as compared to 8 per cent a year earlier, driven by exports push and steady domestic demand. However, it warned that this higher revenue growth is unlikely to flow through fully to earnings, as inflation in raw material, energy and freight costs is expected to compress operating margins by 150-200 basis points (bps) to 21-21.5 per cent. The findings are based on analysing the performance trends of nearly 190 pharmaceutical companies rated by Crisil that account for about half of the sector’s revenue last fiscal year.  

Despite projecting some margin compression, the agency expects strong cash generation, liquidity, and healthy balance sheets to keep the sector's credit profiles resilient. Debt-to-EBITDA for Crisil-rated companies is projected to remain around 1.2 times, while interest coverage is expected to stay close to 10 times this fiscal year. It expects pharmaceutical exports to grow 14-16 per cent in rupee terms during the fiscal, which will be the primary driver of revenue. It noted that the formulations account for about 83 per cent of overseas sales, with 57 per cent shipped to regulated markets and the remainder to semi-regulated markets. 

The report further said the domestic pharmaceutical market will act as a solid second engine of growth, expanding 9-11 per cent this fiscal year. This will be supported by chronic therapies, annual price revisions of 5-6 per cent, and a recovery in volume growth to 4-5 per cent, compared to roughly 2 per cent in each of the past two fiscal years. The volume uptick will be aided by new product launches, higher prescription demand, and deeper penetration into tier-2 and tier-3 markets. 
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