Feb 26, 2016 07:38 PM IST | Source: Moneycontrol.com

Pharma exports seen at 10-11% in next fiscal: CRISIL

Pharmaceutical exports (API and formulations) are expected to sustain 10-11% growth in the next fiscal. Strong US sales are likely to offset increased regulatory scrutiny and currency headwinds in markets such as Europe, and Latin America.

Pharma exports seen at 10-11% in next fiscal: CRISIL
Below is snapview of the state of capital goods industry by CRISIL Research

Healthy growth foreseen

▪ Domestic formulation sales are expected to grow by 13-14% in the next fiscal, aided by strong growth in chronic care therapies and minimal impact from expected pricing interventions

▪ Pharmaceutical exports (API and formulations) are expected to sustain 10-11% growth in the next fiscal. Strong US sales are likely to offset increased regulatory scrutiny and currency headwinds in markets such as Europe, and Latin America.

Margin to remain range-bound

▪ Operating margin of formulation companies is likely to be range-bound (large companies 24-25% and mid-sized 18-20%) next fiscal. Margin expansion, due to improved export realisations, will be limited by a rise in research and development (R&D) and compliance costs.

▪ Margins of bulk drug players are also likely to remain range-bound (17-19%) next fiscal largely on account of pricing pressures, which will limit the benefit of improved volumes.
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