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Pharma Sector Q3 Review: Lupin, Cipla Lead As Chronic Therapies Outshine Acute Drugs

Nuvama found that the slowdown in anti-infective therapy and respiratory drugs is persistent.

<div class="paragraphs"><p>India’s top pharmaceutical companies delivered a mixed performance in the third quarter of fiscal 2025, with revenue growing 9% year-on-year, while Ebitda and net profit rose 13% and 17%, respectively, according to Nuvama Institutional Equities. (Representative image. Source: Envato)</p></div>
India’s top pharmaceutical companies delivered a mixed performance in the third quarter of fiscal 2025, with revenue growing 9% year-on-year, while Ebitda and net profit rose 13% and 17%, respectively, according to Nuvama Institutional Equities. (Representative image. Source: Envato)

India’s top pharmaceutical companies delivered a mixed performance in the third quarter of fiscal 2025, with revenue growing 9% year-on-year, while Ebitda and net profit rose 13% and 17%, respectively, according to Nuvama Institutional Equities.

Lupin Ltd., Cipla Ltd., Sun Pharmaceutical Industries Ltd., and Zydus Lidesciences Ltd. delivered strong revenue and profit growth in the December quarter, beating analyst expectations, and are the brokerages "top performers." On the other hand, Dr. Reddy’s Laboratories Ltd., Natco Pharma Ltd., Orchid Pharma Ltd., and Biocon Ltd. underperformed, with the first two reporting significant declines in profitability.

The domestic market saw a 7% rise in sales, driven by gains in cardiac, oncology, and dermatology therapies, even as anti-infective and respiratory drugs underperformed. Nuvama found that Sun Pharma, Cipla, Lupin, Torrent, and Ajanta benefitted from the shift towards chronic treatments, while Alkem struggled due to weakness in anti-infective sales.

In North America, revenues declined 3% both on a yearly basis and sequential basis, weighed down by softer generic Revlimid sales and increased competition. However, contract development and manufacturing businesses performed well, led by strong growth at Divi’s Laboratories Ltd., while contract research organisations remained under pressure, the brokerage noted.

R&D spending rose 9% year-on-year, accounting for 6.4% of total sales, despite Sun Pharma scaling back investments. Zydus, Lupin, and Dr. Reddy’s Laboratories ramped up research efforts, positioning themselves for future product launches, including semaglutide or diabetes medicines in calendar year 2026.

With the US flu season expected to be strong, Lupin and Aurobindo Pharma Ltd. are likely to benefit in the next quarter. Sun Pharma, supported by lower R&D spending and seasonal demand, could also post strong fourth quarter results, according to Nuvama. However, the anticipated decline in gRevlimid sales by mid-FY26 remains a key concern for generic drugmakers, the note said.

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