Pharma and healthcare sectors showcase robust growth

The pharmaceutical and healthcare sectors reported strong growth in Q2 FY25, driven by a 10% YoY rise in pharmaceutical revenues and a 17.6% increase in healthcare top-line revenue. Chronic therapies and North American markets were key contributors, while hospital revenues saw gains from higher occupancy rates and insurance contributions. 

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Major pharmaceutical companies reported a 10% year-on-year (YoY) growth in the second quarter of FY25, driven by strong performances in North America and the domestic market, as per Axis Securities. The Indian Pharmaceutical Market (IPM) grew by 8% YoY, with chronic therapies achieving a 9% increase, while acute therapies saw a modest 4% growth due to a weak seasonal impact.

Axis Securities noted, “The pharmaceutical universe under our coverage reported Q2 FY25 growth of 10.2%  YoY and 1.7% QoQ, driven by robust growth in North America (10.8% YoY) and the India business (9.8% YoY).” The report also highlighted a positive outlook for the pharmaceutical sector over the next three years, supported by a healthy pipeline in biosimilars, GLP-1, and peptides, which are integral to diabetes and other treatments. “We anticipate a healthy pipeline in segments such as biosimilars, GLP-1, and peptides for pharmaceutical companies over the next three years,” the report added.

The healthcare sector also demonstrated significant growth in Q2 FY25, with top-line revenue rising 17.6% YoY and 10.4% quarter-on-quarter (QoQ). Hospital occupancy rates improved by 340 basis points (bps) YoY and 470 bps QoQ, driving this growth. Insurance payers contributed 33% to hospital revenues, reflecting a 23% YoY and 12% QoQ growth. However, the low insurance penetration indicates opportunities for further expansion as awareness and purchasing power improve.

High-growth therapies such as cancer and cardiac care continued to drive double-digit growth in hospitals. These factors, coupled with rising occupancy rates and Average Revenue Per Occupied Bed (ARPOB), are expected to sustain growth in the healthcare industry. Together, the strong performance of the pharmaceutical and healthcare sectors underscores their resilience and potential for continued expansion.