CRISIL expects the capital expenditure (capex) of India's top 20 pharmaceutical companies, which contribute nearly two-thirds of the country's exports, to increase 40% to over Rs 500 billion till fiscal 2018, compared with about Rs 360 billion seen in the last four fiscals.

''That's because drug makers are expected to pay greater attention to the regulated markets, especially the United States of America (U.S.), to take advantage of substantial patent expiries expected in the medium term, and ever-increasing demand for generics. The regulated markets require higher investments to meet their stringent standards,'' it said.

Out of this lot of 20, the capex spending of 8 companies - which currently generate a majority of revenues domestically - will almost double by fiscal 2018, growing at a much faster pace compared with the rest that are already focused on the regulated markets.

Ramraj Pai, president - ratings, large corporates said, ''Increasing domestic pressures will force Indian companies to seek greener pastures abroad. This will lead to higher expenditure related to compliance, research, and manufacturing capacities. We see their capex rising around 200 basis points to nearly 8% of operating income by fiscal 2018 from 6% now.''

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