Pharma revenues to remain healthy

BENGALURU: Margins and revenues of the pharmaceutical sector are expected to remain healthy in the next financial year ending March 2023 with minimal impact of Covid-19 coupled with continuous API/KSM (Key Starting Materials) supplies from China, according to a report by ICRA.

The ratings agency also predicts stable credit flow for leading pharma players in view of future growth prospects in regulated markets and strong balance sheets.

Despite muted growth in Q1 FY21, the revenues in Q3, are expected to grow by 7-9 per cent and in the range of 8-11 per cent for FY21 hough lower incidences of acute diseases, lesser OPDs and elective surgeries may continue to have some bearing on growth and will depend upon the course of the pandemic.

The API/KSM (Key Starting mAterials) supplies from China, which were initially hit due to the Covid-19, have resumed gradually since March 2020 and are nearing the normalcy levels.

Approximately 60 per cent of the APIs/KSM consumed, is imported from China. Production disruptions owing to restrictions in mobility of manpower and materials eased after the first few weeks of the lockdown. At present, the production has reached 90-95% of the pre-Covid levels. The trend is expected to reverse once the pandemic situation resolves and FY22 margins will remain in line with the pre-Covid level, it added.

Tepid growth in November

India’s pharma industry registered a tepid growth at 1% (YoY) in November led by fall in volumes even as prices and product launches remained steady. Profitability has improved in H1 FY21 owing to lesser overheads like marketing.