Pharmaceutical sector is perhaps the only key industrial segment which continues to register high growth rate in India and also remains somewhat insulated from global recession. This is happening despite tough competition faced by the Indian companies  in the US and European drug markets and at a time when Indian rupee is steadily depreciating against dollar and other major currencies. It is possible that this trend may continue for the pharmaceutical industry for some more time as the life style diseases are spreading like epidemics both in the developed and developing world. A recent Pharmabiz study of financial performances of 100 pharmaceutical companies confirms this upward movement in sales. The turnover of 100 listed pharma companies having an annual sales above Rs. 70 crore recorded a 18.4 per cent growth at Rs. 120,762 crore (around US$ 23 billion) in 2011-12 from Rs.101,964 crore achieved in the previous year. But, the net profit of these companies however, showed a negative trend with a 35 per cent drop at Rs. 8,740 crore in 2011-12 as against Rs. 13,512 crore reported in the previous year. The overall decline in the profit is mainly due to the drop in the profit of Ranbaxy Labs, the largest Indian drug company. Although Ranbaxy recorded a sales of Rs.9,957 crore in 2011-2012 as against Rs.8,535 crore in the previous year, it incurred a net loss of Rs. 2,899 crore during the year as against a net profit of Rs. 1,496 crore in the previous year. This is quite disappointing considering the performances of Dr. Reddy’s Labs and Sun Pharma which ranked second and third in sales during 2011-12. The net profits of these two top companies stood at Rs. 1,426 crore and Rs. 2,587 crore respectively.

A notable aspect emerged from the study is that several Indian pharmaceutical companies have recorded rapid growth in sales over the years. Out of the sample of 100 companies, 30 registered net sales of Rs. 1,000 crore or more during 2011-12 and their combined sales worked out to more than 80.3 per cent of total sales of 100 companies. And the remaining 70 companies contributed to sales of Rs 23,805 crore which worked out to 19.7 per cent. This clearly indicates that almost 70 per cent of the total pharmaceutical sales including exports is controlled by 30 top companies in India. To have a total picture of Indian pharmaceutical industry during 2011-12, the sales and profitability of companies which are not included in the study also needs to be taken into account. There are 57 other listed companies apart from the 100 companies covered in the study. They are not included in the study as their turnovers are very small and are rarely traded in the stock exchanges The combined sales of these 57 companies could be only about Rs.1,000 crore in 2011-12. Then, there are 20 large and medium scale companies such as Alkem Labs, Matrix Labs, Intas Pharma, Micro Labs, Emcure, etc. which are not listed in stock exchanges but their combined sales could be in the region of Rs.20,000 crore or more. Apart from these, there are nearly 7000 small and tiny units spread across the country producing low priced formulations. The sales of most of these small and tiny units can be only in a few lakhs of rupees and most of them are proprietorship or partnership firms.