Pharma Firms Projected to Post 11% Sales and EBITDA Growth in Q1 FY26

July 7, 2025 – According to a recent analysis by Kotak Institutional Equities, pharmaceutical businesses in India are anticipated to record a strong 11% year-over-year rise in both sales and EBITDA for the first quarter of Financial Year 2026 (Q1 FY26).

Broad-Based Growth Across Segments

The maintained market momentum in the majority of regions is responsible for this anticipated expansion. But the survey also noted weak domestic demand in March and April, which could somewhat hurt total profitability.

Due to increased patient traffic, more bed capacity, and an increase in average revenue per occupied bed (ARPOB), hospitals are expected to lead the sectoral expansion with a 17% YoY gain in both revenue and EBITDA.

Increased testing volumes, a positive service mix, and merger and acquisition activity are all likely to help the diagnostics segment record a 14% gain in sales.

Industry Snapshot and Export Strength

India’s pharmaceutical market stood at USD 50 billion in FY24, split between USD 23.5 billion in domestic consumption and USD 26.5 billion in exports. The Indian pharmaceutical industry ranks third globally in terms of volume and 14th by value, showcasing its strong manufacturing and innovation base.

The sector encompasses a wide array of products, including generics, bulk drugs, over-the-counter medicines, biologics, biosimilars, and vaccines, with a firm global footprint.

Government Support for R&D and Innovation

The government has continued to push for advancements in research and innovation through strategic initiatives. Seven National Institutes of Pharmaceutical Education & Research (NIPERs) have been established to offer advanced education and carry out cutting-edge research in the pharmaceutical space. Complementing this, the Department of Pharmaceuticals has introduced a National Policy on Research & Development and Innovation in the Pharma-MedTech Sector in India. This aims to create a vibrant ecosystem for drug discovery and medical device innovation, nurturing entrepreneurship and ensuring holistic development of the industry.

Industry Output Data

According to the National Accounts Statistics 2024, the pharmaceutical, medicinal, and botanical products industry recorded a total output of ₹4,56,246 crore at constant prices for FY 2022–23, with value added of ₹1,75,583 crore.

This projected 11% growth in Q1 FY26 reinforces the resilience of the Indian pharma sector and its continued appeal to investors and global markets.

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