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

Below is snapview of the state of capital goods industry by CRISIL ResearchHealthy 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.