Pharma sector outlook: ICRA pegs 7-9% revenue growth for FY26, US headwinds cloud prospects

India’s pharmaceutical sector is projected to post healthy revenue growth of 7-9 per cent in FY26, aided by robust demand in the domestic and European markets, even as momentum in the United States is expected to cool, according to rating agency ICRA.The domestic market is expected to expand by 8-10 per cent and Europe by 10-12 per cent, while US revenues could moderate to 3-5 per cent in FY26 compared with nearly 10 per cent growth in FY25, the agency said in its latest outlook, PTI reported.“Operating profit margins of the sample entities are expected to remain resilient at 24-25 per cent in FY26, broadly in line with 24.6 per cent in FY25, aided by favourable raw material prices, improved operating leverage and a rising share of speciality products,” ICRA noted.Research and development spending is projected at 6-7 per cent of revenues, with companies stepping up investments in complex molecules and speciality products over generics.ICRA also estimates total capital expenditure for its sample set to reach Rs 42,000-45,000 crore in FY26, including Rs 25,000 crore in inorganic investments.