Motilal Oswal Wealth Management predicts that the Indian pharmaceutical industry would grow by 9-11 percent in FY26, driven mostly by price increases and new launches in the home market, as well as a surge in export demand from regulated markets.
In addition to these growth drivers, the government's production-linked incentive (PLI) scheme for the pharmaceutical industry, which is part of its Make in India initiative, is expected to boost the sector by allowing for the local production of 18-20 percent of imported drugs, according to the wealth management firm.
Motilal Oswal Wealth Management predicts that the addition of beds, better occupancy, and improved realisation will boost profitability in the hospital sector. With expectations of robust growth for the sector firmly set, Motilal Oswal Wealth Management has compiled a list of five equities to which investors can turn to ride the Indian pharmaceutical industry's optimistic wave.
Mankind Pharmaceuticals - The company's prescription business continues to expand faster than the industry average, thanks to its unique portfolio and exceptional execution in chronic medicines.
Max Healthcare - Motilal Oswal Wealth Management believes that a combination of brownfield, greenfield, and inorganic expansion will drive robust revenue growth for Max and pave the road for faster EBITDA breakeven for new beds, resulting in increased operating leverage benefits.
Lupin - The wealth management business highlighted Lupin's impressive profits turnaround, which was fueled by the acquisition of specialized goods in the US generics segment, industry outperformance in the domestic formulation (DF) segment, and distinctive product launches in the EU and growing regions. These changes in Lupin's trajectory are expected to drive its growth in the foreseeable future.
Ipca Labs - The company has made substantial efforts and is working on numerous fronts to continue its excellent profits growth in the coming 2-3 years. Looking ahead, the wealth management firm expects momentum to be driven by product relaunches in the US market, the introduction of new offerings via both its own and Unichem's platforms, outperformance in the domestic formulations and rest of the world (RoW) markets, and synergies developed between Ipca and Unichem's operations.
Piramal Pharmaceuticals - With increased CDMO queries at the industry level in India, Motilal Oswal feels Piramal Pharma is well positioned to benefit from its differentiated competencies and capacity. Additionally, it is expanding its offerings in the complex hospital generics (CHG) area via an established global network. As a result, the wealth management business anticipates Piramal Pharma's net profit to increase to Rs 700 crore by FY26 from Rs 56 crore in FY24.
