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Higher exports to help pharma sector come out ‘unscathed’ from Covid-19 pandemic: CRISIL
Sep-25-2020

Ratings agency CRISIL in its latest report has said that higher exports will help the Indian pharmaceutical sector come out ‘unscathed’ from the Covid-19 pandemic and deliver a marginally lower 9 percent revenue growth. It noted that exports and domestic formulations account for an almost equal share in the Rs 2.8-lakh crore domestic pharma sector.

According to the report, in 2020-21, growth in exports at 11-12 percent, as against 10 percent last fiscal, will outpace growth in domestic formulations expected at 5-6 percent from 10 percent in 2019-20. It also said this will lead to a 8-9 percent overall growth, which is down just 1.50 percentage points from the year-ago period. Besides, it stated that operating profitability for the 350 pharmaceutical companies it rates, which represent 70 percent of the sector's revenue, would soften by 1.50 percentage points but remain healthy at 19 percent despite the higher input prices.

The report further said currently, the export pie is divided into regulated markets such as the US and Europe (45 percent), rest of world (ROW) markets (35 percent), and bulk drugs (20 percent). It said exports growth is expected to remain strong at 10 percent in each of the segments. It noted that the growth in the regulated markets will be supported by a steady increase in new product launches from compliant plants, lower pricing pressure on existing generics, and a visible easing in scrutiny by the United States Food and Drug Administration (USFDA) in recent months.

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