Pharmaceutical companies in India are projected to deliver an 11% year-on-year (YoY) growth in both sales and EBITDA for the first quarter of FY26, according to a recent report by Kotak Institutional Equities. The growth is expected to be driven by sustained momentum across key international markets, despite slightly muted domestic demand in April and March.

The hospital segment is also expected to shine with a robust 17% YoY increase in sales and EBITDA, attributed to increased patient footfalls, capacity expansions through new bed additions, and a modest improvement in Average Revenue Per Occupied Bed (ARPOB).

Diagnostics players are forecast to see a 14% growth in sales, fueled by higher volumes, an improved service mix, and mergers and acquisitions activity.

The Indian pharmaceutical market was valued at USD 50 billion in FY24, with domestic consumption contributing USD 23.5 billion and exports accounting for USD 26.5 billion. India continues to hold its place as the world’s third-largest pharmaceutical producer by volume and 14th by value. The industry’s portfolio spans generic and bulk drugs, OTC products, vaccines, biosimilars, and biologics.

As per the National Accounts Statistics 2024, published by the Ministry of Statistics and Programme Implementation, the pharmaceutical sector’s total output stood at ₹4.56 lakh crore for FY23 at constant prices, with ₹1.75 lakh crore as value added.

With over 9.25 lakh people employed in the sector during FY23, the Indian government has been actively promoting pharmaceutical innovation. The Department of Pharmaceuticals has set up seven National Institutes of Pharmaceutical Education and Research (NIPERs) to foster advanced research and academic excellence.

To accelerate innovation, the department has also rolled out the National Policy on R&D and Innovation in the Pharma-MedTech Sector, aimed at nurturing an entrepreneurial ecosystem and positioning India as a global leader in drug discovery and medical device development.