ImageEmployees at domestic pharmaceuticals are lapping up generous bonuses and increments at a time when most of Corporate India is focusing on ways to cut costs in every possible manner. Pharma companies say that the payouts are intended to retain talent.

A Pharma major Lupin, for instance, has given its employees increments in the range of 25-40%. Says Nilesh Gupta, group president and executive director: “We try and generously reward our top performers to foster a culture of growth and learning. In our latest round of appraisals, close to 20% of higher level positions were filled through internal promotions.”

Like Lupin, Ahmedabad-based Zydus-Cadila is considering increasing the salaries of its staff by as much as 25%. A senior company official told ET: “Since we have been doing well, we want to give out good increments. For those in sales and marketing, we will have bonuses like we did last year.” The average pay hikes at Zydus last year were around 12%, while performance-based bonuses were as high as 90%. “The exact payout will be decided in a couple of weeks,” added the official.

At Mumbai-based Sun Pharmaceuticals, employees are hoping that they will see an encore of last year’s payouts when the R&D department received hikes in the range of 40-50%, while the others got increments between 10% and 15%. “Our increments are announced usually in June,” an employee said on condition of anonymity.

Headhunters working with the pharma industry point out that Indian companies, which focused their attention on the US — the world’s largest pharma market — have done well. “Companies with a healthy presence in regulated markets like the US and Europe will be in a position to offer substantial hikes. Those companies with a strong presence in domestic markets and those that are unregulated will not be able to have large increments,” said Bhadresh Khamar from Kegan Pharma Resources, which specialises in recruiting for the pharma industry. He added that Lupin was able to give out good increments since it was selling eight of its top brands in the US.

It’s not as if all companies in the sector have done well. “While some like Dr Reddy’s, Zydus-Cadila and Lupin have done exceptionally well, this is not the case across all companies in the industry,” says R Suresh, MD at executive search firm Stanton Chase.

A case in point is Glenmark, which suffered this year when the clinical trials of its molecule that was outlicensed to Eli Lilly were stopped. The company also failed to increase the number of molecules that were outlicensed. It also said that it might fail to meet its financial targets for the year. Says Alind Sharma, Glenmark, senior V-P (human resources):

“We will go through the compensation review exercise this year too, though the quantum of increment is expected to be lower than what we had last year.” Last year, increments at Glenmark were in the range of 12-15%. Mid-sized firm Ipca Laboratories will be giving increments in the range of 8-20% this year which is the same as last year.