The March quarter reflected broad-based strength across the industry, with domestic formulations emerging as a key growth driver. Market growth in India improved to around 10%, helping companies post healthy revenue growth despite concerns around the loss of exclusivity benefits from Revlimid.
Manpuria noted that most companies have navigated the post-Revlimid phase better than expected, providing investors with greater clarity on the profitability of their core businesses. This has also improved visibility on future earnings growth and margin trends.
A major theme for FY27 is expected to be the rollout of Semaglutide-based therapies. According to Manpuria, “Semaglutide is not only an opportunity in India, but for some companies also outside India.” Investors will closely track how companies monetise these opportunities across domestic and international markets over the next year.
While companies continue to diversify into newer growth segments such as specialty products, consumer healthcare, contract manufacturing and medical technology, the US market remains critical for the sector. New product launches and pipeline execution in the US are expected to remain important growth drivers.
Manpuria also highlighted increased merger and acquisition activity across the healthcare ecosystem. Strong cash flows and healthy balance sheets have enabled companies to pursue acquisitions beyond traditional generics, creating new long-term growth avenues.
On sector preferences, Manpuria believes contract development and manufacturing organisations (CDMOs) are currently better placed than many other healthcare segments.
CDMO companies benefit from currency tailwinds and typically have the ability to pass on higher raw material costs to customers, reducing the impact of API inflation. Domestic-focused pharmaceutical companies, on the other hand, could face greater pressure if input costs continue to rise, as they were among the biggest beneficiaries of lower API prices after the pandemic.
The ongoing conflict in West Asia remains a key risk for the industry. Rising freight rates, higher insurance costs and longer shipping routes have already begun impacting logistics expenses.
While crude-linked solvent prices have increased, the impact on active pharmaceutical ingredient (API) costs has so far been limited. However, Manpuria believes the situation requires close monitoring as prolonged geopolitical tensions could eventually push up input costs.
The full effect is likely to become visible only in the second half of the year because most companies currently have sufficient inventory buffers. Despite the uncertainty, she does not expect higher API prices to derail investment plans or acquisition activity, given the industry’s strong cash generation.
