Steady US sales to bring a healthy quarter for pharma sector

During January to March 2024, the Healthcare Index outperformed the Sensex by 9 percent.

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26 Aug, 2025 12:21

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Indian pharmaceutical companies are expected to unveil a robust performance in the fourth quarter of FY24, buoyed by strong sales in the US amid a slowing of the domestic acute therapy segment.

Drug makers in India stand to benefit from sustained gains in specialty generic products such as Revlimid and Spiriva, alongside relaxed price pressures in the US generics market, coupled with softened input and energy costs, and rupee depreciation against the backdrop of moderating domestic formulations.

The Healthcare Index outperformed the Sensex by 9 percent during January to March, mirroring the sales trends in both the domestic chronic therapy and export markets, as noted by analysts.

Brokerages expect low double-digit revenue growth for pharmaceutical companies in the fourth quarter, although net profit and EBITDA estimates vary. Brokerages project a 20-34 percent growth in profit after tax and a 15-25 percent year-on-year rise in earnings before interest, taxes, depreciation, and amortisation (EBITDA).

US generics growth

Moderating pricing pressures complemented by increased traction in limited-competition generic products such as Revlimid and Spiriva is likely to strengthen YoY growth of the US generics segment. Growth in these companies will be led by niche launches (g-Spiriva and other key products for Lupin/g-Revlimid and other launches for Dr. Reddy’s Laboratories/new launches for Alembic Pharma).

Sun Pharma’s US sales are likely to grow 12 percent YoY, led by the specialty drugs portfolio, according to Motilal Oswal. There was a reduction in the pace of drug filings during the first nine months of FY24 as companies focused on complex drugs. In Q4, 49 approvals were granted for companies tracked by Motilal Oswal, compared with the three-quarter average of 54.

Strong sales pickup for g-Revlimid is expected for Indian companies in the fourth quarter. Dr Reddy's is anticipated to continue leading with sales of about $90 million, followed by Zydus Life, Cipla, and Sun Pharma with $70 million each, and the latest entrant Aurobindo Pharma $30 million, according to Phillip Capital.

Also read: Essential medicines to be slightly costlier from April 1

While the US generic market continues to see easing pricing pressure, the continued benefits from key launches (including g-Revlimid, g-Spiriva and g-Emplaza) and 1 percent rupee depreciation YoY complements US generics growth.

For companies manufacturing active pharmaceutical ingredients (APIs), analysts at Kotak Securities expect a volume-led uptick, factoring in 20 percent QoQ overall sales growth.

Furthermore, the rupee has depreciated against the US dollar, euro, and British pound by 1 percent, 3 percent, and 6 percent YoY, respectively, but appreciated against currencies like the Ruble and the rand by 19 percent and 5 percent, respectively, in the January-March period. These are significant export destinations for Indian pharmaceutical companies.

Muted growth in India

After consistent double-digit growth in the branded formulations business in recent years, growth in the domestic formulation segment has moderated to the high single digits. Therapeutic segments such as cardiac, diabetes, and the central nervous system (CNS) recorded over 10 percent YoY growth, while other segments also exhibited positive momentum, except for respiratory, which declined in February.

For the 12-month period ended February 2024, the Indian Pharmaceutical Market (IPM) expanded by 9 percent, driven by price hikes (up 4 percent) and growth in new product launches (up 3 percent), supported by a 2 percent increase in volume.

Chronic therapies, constituting 38 percent of the IPM, grew by 10 percent, whereas acute therapies, representing 62 percent of the IPM, rose 8 percent.

Analysts noted that unit growth has been a challenge for IPM in recent months. On the domestic formulation business, given the seasonal weakness, the acute and trade generic business are expected to remain soft while chronic business will have steady growth, according to analysts at Prabhudas Lilladher.

Also read: Indian pharmaceutical market registers 9.5% growth in March