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Informist, Tuesday, Jul. 8, 2025

 

By P. Madhu Kumar

 

MUMBAI – Most pharmaceutical companies within the Nifty 200 universe reported growth in revenue and net profit in the quarter ended March. Some companies like Apollo Hospitals Enterprise, Divi's Laboratories, and Lupin posted strong earnings, while others such as Sun Pharmaceutical Industries and Max Healthcare Institute fell short of expectations due to higher costs. Overall, healthy domestic demand and new launches played a key role in sustaining the sector's growth.

 

Revenue growth of all the 13 pharmaceutical and healthcare companies was positive, with Max Healthcare Institute, Mankind Pharma, and Zydus Lifesciences posting strong double-digit growth. Revenue growth was largely supported by new product launches, expansion in domestic markets, and stable demand in chronic therapy segments.

 

The net profit growth, however, was uneven. Some companies reported robust growth in profit driven by improvement in margin and lower tax outgo, while others posted decline or flat growth due to higher operating costs and tax outgo. Lupin, Divi's Labs, and Apollo Hospitals were the standout performers, while Sun Pharma and Mankind Pharma lagged due to specific cost pressures.

 

Among Nifty 50 participants, Apollo Hospitals reported a 53.5% jump in net profit to INR 3.9 billion and 13% revenue growth, driven by improved hospital occupancy. Cipla posted over 30% growth in profit to INR 12.22 billion due to strong performance in Africa and emerging markets. Dr. Reddy's Laboratories delivered nearly 22% net profit growth and 20% revenue growth, supported by launches in the US and Europe. Sun Pharma, however, reported a 19?ll in net profit due to exceptional charges and weak US sales, despite 8% rise in revenue.

 

TOP PERFORMERS

Lupin was the top performer in terms of net profit growth. Its net profit surged 115% year-on-year. Margin expansion and reduced tax outgo contributed to the strong earnings. Divi's Labs also posted solid growth, with net profit up 25.6% and revenue rising 12.3%, continuing its trend of consistent performance.

 

Apollo Hospitals reported a strong on-year growth of over 53% in net profit and Biocon's net profit, excluding exceptional items, soared 125% due to new biosimilar launches in the US and a significant drop in taxes.

 

On the revenue front, Max Healthcare posted the highest growth of 34%, driven by increased patient volumes. Mankind Pharma followed with a 27% rise in revenue, supported by strong growth in the chronic and consumer segments and recent acquisitions. Zydus Lifesciences delivered 18% revenue growth, supported by 24% rise in US sales owing to new launches and volume expansion.

 

UNDERPERFORMERS

Sun Pharma was the biggest disappointment in the sector, with its profit declining 19% on year due to one-time charges and weaker US business. Max Healthcare, despite strong revenue growth of over 33% on year, saw limited net profit growth of 27% as costs rose sharply, and missed analyst estimates. Mankind Pharma reported a 11?cline in net profit despite strong revenue.

 

Aurobindo Pharma posted flat net profit growth as tax outgo offset its 11% rise in revenue. Torrent Pharmaceuticals saw a profit rise of just 11%, missing estimates due to slower growth in Brazil and Germany.

 

The total net revenue from operations of the Indian pharmaceutical sector rose 13.3% on year to INR 716.81 billion in Jan-Mar. Despite rising costs and debt, the profit after tax excluding exceptional items stood at INR 113.46 billion, a 13.57% increase from the year-ago period. On a sequential basis, revenue grew by 2.12%, while the net profit saw a decline of 3.3%.

 

SECTOR OVERVIEW

In terms of net profit, excluding exceptional items, five companies outperformed the sector's average net profit growth of 13.57%, while eight companies underperformed. Companies that reported a higher net profit growth than the sector average included Dr. Reddy's Labs, Cipla, Zydus Lifesciences, Lupin, and Divi's Labs. These companies benefitted from operational efficiency, strong domestic and international formulation sales, or lower tax outgo. Dr. Reddy's posted a net profit of INR 15.93 billion and Zydus INR 13.91 billion.

 

On the other hand, seven companies fell short of the sector's average bottom-line performance. These were Biocon, Apollo Hospitals, Max Healthcare, Mankind Pharma, Torrent Pharmaceuticals, Alkem Labs, and Aurobindo Pharma. Some of them faced higher operating costs, reduced margins, or elevated tax outgo, which impacted their bottom lines despite decent revenue growth.

 

In terms of revenue from operations, six companies posted better-than-average growth of 13.29%, while seven underperformed. Outperformers included Dr. Reddy's, Zydus Lifesciences, Lupin, Divi's Labs, Mankind Pharma, and Max Healthcare. 

 

Six companies reported revenue growth below the sector average. These were Alkem Labs, Apollo Hospitals, Biocon, Cipla, Aurobindo Pharma, and Torrent Pharma. Though some of them posted year-on-year revenue growth, they fell short of the sector's 13.29% growth, due to weaker export performance, subdued US sales, or lower-than-expected domestic contributions.

 

Going forward, controlling costs, executing new product launches efficiently, and focusing on export markets will be crucial for sustaining earnings momentum.

 

The following table shows the performance of the 13 companies from the pharmaceutical and healthcare sector in the Nifty 200 index vis-a-vis the consensus estimate for each company as well as the consensus estimate for the sector and the Nifty 200:

 

Company	PAT beat analysts' estimate	Adjusted YoY PAT growth %	Adjusted YoY PAT growth estimate %		Revenue beat analysts' estimate	Revenue YoY growth %	Revenue YoY growth estimate %
ALKEM LABORATORIES LIMITED	NO	-0.07	16.36		YES	7.08	7.00
APOLLO HOSPITALS ENTERPRISE LIMITED	YES	53.51	43.39		YES	13.11	12.96
AUROBINDO PHARMA LTD	NO	-12.36	-0.46		YES	10.58	8.81
BIOCON LIMITED	YES	124.60	17.05		YES	12.76	5.17
CIPLA LIMITED	YES	30.12	10.50		NO	9.19	9.89
DIVI'S LABORATORIES LIMITED	YES	25.61	15.07		NO	12.26	12.92
DR.REDDY'S LABORATORIES LTD	YES	21.64	11.03		YES	19.89	17.23
LUPIN LIMITED	YES	114.93	106.69		YES	14.24	12.11
MANKIND PHARMA LIMITED	YES	-10.91	-21.43		NO	27.13	28.86
MAX HEALTHCARE INSTITUTE LIMITED	NO	26.82	67.28		NO	34.21	64.00
SUN PHARMACEUTICAL INDUSTRIES LIMITED	NO	-8.87	4.64		NO	8.14	10.78
TORRENT PHARMACEUTICALS LTD	YES	16.26	15.58		NO	7.80	8.67
ZYDUS LIFESCIENCES LIMITED	YES	17.61	16.15		YES	17.96	9.98

 

End

 

Edited by Ashish Shirke

 

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