Overview
- ICRA projects regional drivers with 8–10% growth in India and 10–12% in Europe, while the US slows to 3–5% after nearly 10% in FY25.
- Domestic demand is supported by sales-force expansion, deeper rural reach and new launches, with Q1 FY26 Indian market growth at 10.3% year on year.
- Companies plan ₹42,000–45,000 crore of capex in FY26, including about ₹25,000 crore in inorganic investments to expand higher-value portfolios.
- R&D is expected at 6–7% of revenues as firms focus on complex molecules and specialty products rather than plain-vanilla generics.
- Operating margins are forecast near 24–25% with strong liquidity, though leverage may rise to 1.1–1.2x Total Debt/OPBITDA as USFDA actions, price erosion, lenalidomide declines and potential US tariff or MFN pricing moves pose risks.