Indian Pharma Sector Forecasts 10 Percent Growth Through FY27

The Indian pharmaceutical sector is projected to maintain steady growth through FY27, characterized by strong domestic demand and a recovery in the Active Pharmaceutical Ingredient (API) and Contract Development and Manufacturing Organization (CDMO) segments. 360 ONE Capital forecasts 10 percent year-on-year revenue growth for 1QFY27, with domestic markets expected to rise by 12.7 percent and the CDMO/API segments growing by 9.9 percent.

Despite overall growth, the sector faces regional and operational headwinds. Business in the United States is expected to decline by 9.3 percent, a result of a high base from previous Revlimid-related sales. Additionally, EBITDA margins are projected to contract by 125 basis points to 24.6 percent, driven by increasing costs for power, freight, and inputs.

Opportunities in GLP-1 therapies have introduced recent instability. Dr. Reddy's Laboratories discontinued commercial supplies of its generic semaglutide injection after encountering API-related quality issues during commercial scale-up. This discontinuation has created near-term uncertainty for other pharmaceutical companies operating within the GLP-1 space.