Indian pharma companies, on the strength of their low-cost manufacturing capabilities and abundant talent pool, are adopting lower-risk business models for growth by entering into contract- manufacturing arrangements and marketing collaborations with strong global players. Most players are also expected to maintain healthy financial risk profiles by funding growth initiatives and capital expenditure prudently.

The report said that  that Indian players will defend their established positions in the domestic market aggressively, as the domestic market accounts for around 45 per cent of their total revenues, and is a source of steady cash flows.

Furthermore, after gauging the risks associated with new molecule research, Indian entities are likely to be more circumspect in their research and development ambitions.

Says Sudip Sural, head, CRISIL Ratings, ''CRISIL's outlook on the domestic pharma sector, therefore, remains stable for 2010. The future credit risk profiles of individual players will, however, be governed by their respective growth strategies, financial policies, and risk management practices.''