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CRISIL has studied the performance of 216 micro, small, and medium enterprises (MSMEs) that it rated in 2013-14 (financial year April 1 to March 31). The sample was chosen from MSMEs engaged in manufacturing pharmaceutical products across India. The study indicates that the average sales of these MSMEs showed a compound annual growth rate (CAGR) of 23 per cent between 2010-11 and 2012-13, with MSMEs in North India clocking the highest CAGR - 26 per cent - in the analysis period.
North India's growth trend is in fact being driven mainly by Baddi - an industrial town in the Solan district of Himachal Pradesh - where the sales growth of MSMEs reached a very healthy CAGR of 30 per cent. Various incentives from the state and Central governments have enabled this town to offer superior infrastructure and various cost benefits, which has in turn helped boost MSME sales growth, including exports. The majority of pharma MSMEs across India operate as contract manufacturers for large players and derive almost two-thirds of their revenue from exports to semi-regulated and developed markets.
Note: The analysis is based on the latest audited financial statements of CRISIL-rated MSMEs. Most enterprises finalise their audited financials by the end of the second quarter, after the closure of the financial year. CRISIL rates over 50,000 MSMEs in India. This fortnightly tracker presents to our readers insights on MSMEs, a key element of the Indian economy.
