Indian Pharma: Strong Balance Sheets to Sustain M&A Momentum

Mumbai: India Ratings and Research (Ind-Ra) believes Indian pharma companies’ strong balance sheets and sub-1x leverage profile (FY26: nearly 0.8x) provide headroom for sustained M&A-led growth, despite acquisition-led expansion, without materially weakening credit quality. This is reflected in largely stable rating actions, supported by double-digit revenue growth, around 70% gross margins, and above 25% EBITDA margins, alongside healthy cash flows. While working capital intensity has increased (cycle up about 10 days), balance sheets remain resilient. As one-off gains moderate and cost pressures emerge in FY27, Ind-Ra expects M&A to remain