Currency tailwinds to support Indian pharma sector’s earnings in FY27

A sharp depreciation in the Indian rupee over the past few months is expected to provide a meaningful boost to the earnings of domestic pharmaceutical companies in FY27, particularly those with strong export exposure, according to a report by Elara Securities.

The brokerage noted that the sector is largely overseas-oriented, with a significant share of revenues coming either from exports out of India or from the local operations of foreign subsidiaries.

Based on an analysis of 18 major drugmakers, the weaker rupee could increase reported revenues by up to 5% and EBITDA by as much as 15%, given the sector’s heavy reliance on international markets.

The report highlighted the global nature of the Indian pharmaceutical industry. Among the companies analysed, four— Biocon , Granules India , Aurobindo Pharma, and Gland Pharma—derive over 90% of their revenues from overseas markets.

Another 11 companies, including Dr. Reddy’s Laboratories , Natco Pharma , and Zydus Lifesciences, generate more than 70% of their revenue internationally. Overall, 16 of the 18 firms earn over half their revenues from outside India, making them natural beneficiaries of currency movements.

The rupee has weakened sharply against most major global currencies over the past three to four months. If current exchange rates persist, it could remain 6–15% weaker in FY27 compared to FY26 levels, providing a sustained currency tailwind.

The currency has depreciated nearly 5% so far in calendar year 2026, breaching the 95 mark against the US dollar for the first time by the end of March. This decline has been driven in part by escalating Middle East tensions, which pushed Brent crude prices up by around 60% to nearly $120 per barrel.

“Given their geographic revenue mix and the extent of INR depreciation against respective currencies, nearly all companies in our pharma universe stand to benefit from currency movements,” the brokerage said.

The report estimates that, assuming a basket of foreign currencies remains about 5.8% stronger against the rupee, most companies could see an incremental 1–5% revenue boost purely from currency gains, with Granules India among the biggest beneficiaries.

Companies such as Biocon, Granules India, Aurobindo Pharma and Gland Pharma are likely to see the strongest gains due to their high global exposure. In contrast, domestically focused players like Eris Lifesciences and Mankind Pharma may face some pressure from rising import costs and overseas expenses.