Domestic pharma firms expected to post 7-9% revenue growth in FY26: Icra

Revenue for the sample set of companies is projected to expand by 7-9% in FY2026, supported by 8-10% growth in the domestic market and 10-12% growth in Europe, Icra said

Revenue of leading domestic pharmaceutical companies is set to expand by 7-9 per cent in the current fiscal even as global headwinds and regulatory uncertainties cast a shadow over its largest export market, the US, as per rating firm Icra.

Revenue for the sample set of companies is projected to expand by 7-9 per cent in FY2026, supported by 8-10 per cent growth in the domestic market and 10-12 per cent growth in Europe, it stated.

However, performance in the US market is expected to moderate, with year-on-year growth slowing to 3-5 per cent, from nearly 10 per cent in FY2025, Icra said.

The operating profit margins (OPM) of ICRA's sample entities are expected to remain resilient at 24-25 per cent in FY2026, broadly in line with 24.6 per cent in FY2025, aided by favourable raw material prices, improved operating leverage, and a rising share of speciality products, it added.

Research and Development (R&D) spending is projected to remain steady at 6-7 per cent of revenues, with companies increasingly focusing on complex molecules and speciality products over generics, Icra said.

Icra said it estimates total capital expenditure for its sample set to reach Rs 42,000-45,000 crore in FY26, including Rs 25,000 crore in inorganic investments.