Export boost to help pharma sector come out ‘unscathed’ from COVID-19 pandemic
Higher exports will help the Indian pharmaceutical sector come out “unscathed” from the coronavirus pandemic and deliver a marginally lower 9 per cent revenue growth, ratings agency CRISIL said on Thursday.
Exports and domestic formulations account for an almost equal share in the Rs 2.8-lakh crore domestic pharma sector, CRISIL said.
CRISIL said export growth is expected to remain strong at 10 per cent in each of the segments. The growth in the regulated markets will be supported by a steady increase in new product launches from compliant plants, lower pricing pressure on existing generics, and a visible easing in scrutiny by the United States Food and Drug Administration in recent months, it said.
However, steady demand for chronic therapies pertaining to lifestyle diseases should help keep domestic formulation sales growth at 5-6 per cent, she added.
Despite the slight moderation in business performance, credit profiles of domestic companies would remain largely steady, benefiting from healthy balance sheets and liquidity, the note said adding that equity infusions from private equity funds have helped.
The pharma companies will be prudent in capital and research and development spending, as well as efficient working capital management while transitioning through the current times, it said.
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