India’s pharmaceutical sector is likely to record a steady 11 per cent year-on-year growth in both sales and EBITDA for the first quarter of FY26, supported by sustained market traction across geographies, a new report by Kotak Institutional Equities has said. However, the report warned that muted domestic demand in April and March may partially offset the gains, as per news agency ANI.“For pharma companies, we expect continued traction across most markets to drive 11%/11% yoy growth in overall sales/EBITDA in 1QFY26,” the brokerage noted in its sector outlook.The hospitals segment is expected to outpace the broader pharma industry, posting a robust 17 per cent growth in both revenue and EBITDA, aided by higher patient footfalls, new bed additions, and a moderate increase in Average Revenue Per Occupied Bed (ARPOB). Meanwhile, diagnostics firms are projected to see a 14 per cent jump in sales on the back of better test mix, organic volume expansion, and recent merger and acquisition activity.India’s pharmaceutical market stood at $50 billion in FY24, with exports contributing $26.5 billion and the domestic market valued at $23.5 billion. Globally, India ranks third in production volume and 14th in value, with a strong portfolio of generics, over-the-counter drugs, vaccines, biologics, and biosimilars.According to the National Accounts Statistics 2024 by the ministry of statistics and programme implementation, the gross output from pharmaceuticals, medicinal and botanical products was Rs 4.56 lakh crore in FY23 at constant prices, with Rs 1.75 lakh crore in value addition. Nearly 9.26 lakh people were employed in the sector during the period, government data showed.The government continues to invest in pharma R&D and education. Seven National Institutes of Pharmaceutical Education & Research (NIPERs) have been set up by the department of pharmaceuticals to promote high-end academic and industry-oriented research. These institutions also support postgraduate and doctoral training in advanced pharma specialisations.To further boost innovation, the department has introduced the National Policy on Research & Development and Innovation in the Pharma-MedTech Sector. The policy aims to foster a robust R&D ecosystem and promote entrepreneurship, enabling India to become a global leader in drug discovery and medical device innovation.The outlook remains optimistic for India’s pharma industry, with policy support, institutional research, and global market reach expected to sustain growth momentum across all segments.
