**Pharmaceutical Sector Anticipates 11% Growth in Q1 FY26**
The Indian pharmaceutical industry is projected to achieve an 11% year-on-year growth in both sales and EBITDA for the first quarter of Financial Year 2026 (Q1FY26), driven by consistent momentum across various markets, as reported by Kotak Institutional Equities. However, the report notes that subdued domestic demand in March and April may slightly temper these gains.
The hospitals segment is expected to experience a robust 17% year-on-year growth in sales and EBITDA, bolstered by increased patient footfalls, the addition of new hospital beds, and a modest rise in Average Revenue Per Occupied Bed (ARPOB). In the diagnostics sector, a combination of volume growth, improved product mix, and mergers and acquisitions is anticipated to contribute to a 14% year-on-year increase in sales across the industry.
The report emphasizes, “For pharma companies, we expect continued traction across most markets to drive 11%/11% year-on-year growth in overall sales/EBITDA in Q1FY26.” The Indian pharmaceutical market is valued at USD 50 billion for FY 2023-24, with domestic consumption at USD 23.5 billion and exports at USD 26.5 billion. The domestic pharma industry ranks as the third largest globally by volume and the 14th in terms of production value.
With a highly diversified product portfolio that includes generic drugs, bulk drugs, over-the-counter medications, vaccines, biosimilars, and biologics, the Indian pharmaceutical sector maintains a strong global presence. According to the National Accounts Statistics 2024 from the Ministry of Statistics and Programme Implementation, the total output for the pharmaceutical industry, including medicinal and botanical products, reached ₹4,56,246 crores for FY 2022-23 at constant prices, with a value addition of ₹1,75,583 crores. Government data indicates that 9,25,811 individuals were employed in the pharmaceuticals, medicinal, and botanical products sector during FY 2022-23.
Research and development (R&D) in the pharmaceutical sector is supported by various institutions and organizations under different scientific ministries and departments. The Department of Pharmaceuticals has established seven National Institutes of Pharmaceutical Education & Research (NIPERs) as institutes of national importance, which not only provide postgraduate and doctoral education but also conduct advanced research in various pharmaceutical specializations. Furthermore, the Department has introduced a “National Policy on Research & Development and Innovation in Pharma-MedTech Sector in India” to foster R&D in pharmaceuticals and medical devices. This policy aims to create an innovative ecosystem that positions India as a leader in drug discovery and innovative medical devices, promoting an entrepreneurial environment to ensure comprehensive development in R&D and innovation.
**FAQ**
**What is the expected growth rate for the Indian pharmaceutical industry in Q1 FY26?**
The Indian pharmaceutical industry is expected to grow by 11% year-on-year in both sales and EBITDA for the first quarter of Financial Year 2026.
