Purpose This study examines how financial flexibility and working capital efficiency influence profitability in the Indian pharmaceutical sector across pre-COVID, COVID and post-COVID phases. It integrates corporate-finance drivers with pharmaceutical-marketing relevance by analyzing how liquidity buffers, leverage decisions and operational efficiency support brand continuity, physician outreach and market resilience during crises. This study aims to provide a holistic explanation of how financial architecture shapes both financial performance and marketing robustness in a highly regulated, innovation-driven health-care industry. Design/methodology/approach Using panel data from 32 listed Indian pharmaceutical firms (2016–2025), this study uses dynamic fixed-effects regression with firm-clustered standard errors. DuPont decomposition is used to unpack profitability drivers, while COVID-phase interaction models identify crisis-specific behavior. Post-COVID robustness tests validate the stability of key determinants. Multiple endogeneity checks are conducted following GMM diagnostics, supplemented with theoretical justification for estimator choice. The methodological framework integrates financial modelling with context-specific pharmaceutical-marketing considerations, accounting for supply-chain pressure, branding continuity and liquidity-driven promotional decision-making during crisis periods. Findings Financial flexibility – particularly lower leverage, stronger liquidity and efficient receivables and inventory management – significantly enhances profitability across all phases. During the COVID period, receivable efficiency and cash buffers display heightened importance, reflecting the need to maintain physician reach, distribution reliability and promotional continuity. DuPont analysis shows that profitability shifts were driven primarily by margins rather than leverage effects. Post-COVID robustness confirms the persistence of these determinants. The results emphasize that operational and capital-structure decisions jointly shape both financial and marketing-related performance drivers in the pharmaceutical industry. Research limitations/implications This study is limited to publicly listed Indian pharmaceutical firms, which may differ from SMEs in flexibility, branding strategy and supply-chain exposure. The data set ends in 2025; forthcoming regulatory changes or post-pandemic market adjustments may alter firm behavior. Although multiple endogeneity diagnostics support estimator choice, unobserved technological or therapeutic-category shifts may still influence profitability. Future research may integrate product-portfolio complexity, R&D diversification and promotional-mix strategies to deepen the marketing–finance interface in health-care markets. Practical implications Managers should prioritize liquidity buffers, conservative leverage policies and receivables management to sustain profitability and protect brand investments during disruptions. Strengthening financial flexibility helps ensure stable physician engagement, uninterrupted promotion and reliable distribution – especially in crisis periods. Firms can use DuPont insights to optimize operational drivers of return generation. Results guide CFOs and marketing heads on synchronizing financial planning with branding and market-access initiatives, ensuring resilience against regulatory shocks, supply-chain delays and evolving health-care demand. Social implications Financially resilient pharmaceutical firms are better positioned to ensure consistent medicine availability, uninterrupted patient access and stable health-care delivery during emergencies. Efficient working-capital systems strengthen supply-chain continuity, reduce stockouts and improve the availability of essential therapies. Stronger financial flexibility also allows firms to maintain socially important promotional and physician-education activities during crises. This study highlights how financial architecture indirectly influences public health outcomes by shaping firms’ ability to remain operationally and marketing-wise stable under uncertainty. Originality/value This study uniquely integrates corporate-finance principles with pharmaceutical-marketing theory, offering a dual-lens explanation of how financial flexibility shapes profitability and brand resilience. It provides the first Indian pharmaceutical sector evidence covering pre-COVID, COVID and post-COVID phases using dynamic panel estimators, DuPont analysis and crisis-interaction modeling. This study contributes by linking liquidity management, leverage and operational efficiency to marketing continuity, distribution stability and physician-facing engagement – bridging a notable gap between financial decision-making and market-based performance in health-care industries.
Vijay Agrawal (Wed,) studied this question.