The pharmaceutical sector is poised for a positive trajectory over the next three years, with a healthy pipeline of innovative products expected in areas such as biosimilars, GLP-1, and peptides. These therapies are pivotal in treating conditions like diabetes and other chronic illnesses. Companies with a stronger focus on chronic portfolios continue to outperform the broader market, reinforcing their long-term growth potential.
Meanwhile, the healthcare sector demonstrated an impressive 17.6% YoY growth in top-line revenue for Q2FY25, with a QoQ increase of 10.4%. Improved hospital occupancy rates, which rose by 340 basis points (bps) YoY and 470 bps QoQ, played a significant role in this growth. The hospital segment also benefited from insurance payers, who contributed 33% to total revenues, marking a 23% YoY and 12% QoQ growth.
Major pharmaceutical companies in India recorded a robust 10% year-on-year (YoY) growth in the second quarter of FY25, fueled by strong performances in both North America and the domestic market, according to a report by Axis Securities. The Indian Pharmaceutical Market (IPM) also grew by 8% YoY, driven by a 9% increase in chronic therapies, while acute therapies saw more subdued growth of 4%, attributed to a weak season for these segments.
The report stated, “The pharmaceutical universe under our coverage reported Q2FY25 growth of 10.2% YoY and 1.7% quarter-on-quarter (QoQ), driven by robust growth in North America (10.8% YoY) and the India business (9.8% YoY).” This solid performance underscores the sector's resilience and continued demand in key markets.
Despite this, insurance penetration in the healthcare sector remains low, presenting substantial opportunities for future growth as health insurance awareness and purchasing power rise. High-growth therapies, particularly in cancer and cardiac care, continued to drive double-digit growth in hospitals. Combined with increasing occupancy rates and Average Revenue Per Occupied Bed (ARPOB), these trends are expected to sustain the momentum of growth in the healthcare industry.
The report signals a promising outlook for both the pharmaceutical and healthcare sectors, supported by innovation, expanding insurance coverage, and rising demand for specialized therapies.
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