Ratings agency ICRA in its latest report has said that revenue growth of some of the leading drugs firms is estimated at 7-9 percent in FY2022 and 8-11 percent in FY2023, with gradual improvement in the COVID-19 situation in the country. It noted that the growth will be supported by the consistent demand for pharmaceutical products and low base of FY2021, though some impact on volume growth will be witnessed due to the second wave of COVID-19 2.0 related lockdowns.
According to the report, the credit outlook for the Indian pharmaceutical industry remains stable led by healthy accruals, low leverage levels and healthy liquidity profile of the pharmaceutical companies. It expects the credit metrics of its sample set of Indian pharmaceutical companies to remain comfortable despite higher capital expenditure and R&D expenses. Furthermore, it added that the liquidity profile of these companies is also expected to remain comfortable.
The ratings agency has noted that the impact of COVID-19 on the Indian drug firms was relatively limited last fiscal due to consistent demand for pharmaceutical products and resumption of imports of key input materials from China from March 2020 onwards. The revenue growth for ICRA sample of 21 companies remained muted at 5.8 per cent in FY2021.