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Informist, Monday, Aug. 25, 2025

 

By Narayana Krishna

 

HYDERABAD - Despite weak US sales, pricing challenges, and lower occupancy in hospitals, the pharmaceutical and healthcare sector reported healthy earnings growth for the June quarter. Robust domestic demand along with increased market share in select therapies, growth in emerging markets and Europe, and new product launches helped pharmaceutical companies to report strong growth for the quarter, according to analysts.

 

The 14 pharma and healthcare companies belonging to the Nifty 200 index reported an aggregate on-year growth of 5.39% in net profit excluding exceptional items, surpassing the consensus estimate of a 3.94% rise for the June quarter. These companies delivered an aggregate on-year revenue growth of 10.06% in Apr-Jun. Despite registering a double-digit growth, the figure was a tad lower than the estimated growth of 11.52%.

 

Nine of these 14 companies surpassed aggregate estimates for net profit growth and revenue growth in the June quarter. Despite posting better net profit growth than analyst estimates on an aggregate basis, it was still below the NSE 200 companies' overall net profit growth of 9.95%.

 

On the revenue front, the aggregate growth of these companies outperformed with 5.64% on-year growth against the NSE 200 companies' overall growth of 2.11%. Among the outperformers, Lupin Ltd. tops the list with 52.13% on-year growth in its net profit for the June quarter. Including Lupin, seven companies' results came above Street estimates, five missed expectations, and two posted higher-than-anticipated declines. Top performers included Alkem Laboratories Ltd., Cipla Ltd., Lupin Ltd. and Sun Pharmaceutical Industries Ltd. Biocon reported the weakest number, with a 95% on-year fall in net profit in the June quarter against analyst estimates of an 84?ll. In the healthcare sector, Apollo Hospitals Enterprise Ltd. outperformed with robust net profit growth of 41.18% against estimates of 21.18%.

 

In terms of revenue, five companies exceeded analysts' estimates, two met expectations, and seven fell short. Mankind Pharma Ltd. is the top performer with 24.50% growth in revenues, though it missed the estimates of a 24.66% rise by a narrow margin, led by domestic sales growth.

 

Dr. Reddy's Laboratories Ltd., Lupin, Torrent Pharmaceuticals Ltd., and Alkem Labs posted double-digit revenue growth. Apollo Hospitals continued healthy revenue growth in the healthcare space in the June quarter with a 14.88% on-year rise, above the estimates of 12.54% rise. Glenmark Pharmaceuticals Ltd., Aurobindo Pharma Ltd., and Cipla underperformed in the pharma space with weak single-digit and lower-than-estimated numbers. 

 

PAIN IN US

Indian pharmaceutical companies continued to face headwinds in North America, while emerging markets and Europe delivered robust growth, supported by strong domestic sales in the June quarter.

 

North America, mainly the US, remained a weak market, with revenues subdued for most companies except Lupin. The decline was driven by slowing generic Revlimid contributions and continued price erosion. Dr. Reddy's reported an 11% year-on-year fall in its North America revenue for Apr-Jun due to a fall in Revlimid sales. Cipla's North America sales fell 10% on year, despite resolving supply-chain issues around its key generic drug Lanreotide. Lupin reported a 39% on-year rise in US sales led by its hyponatremia generic drug Tolvaptan.

 

The domestic business was resilient, with the Indian pharmaceutical market growing 8.6% on year in Apr-Jun, led by cardiac and respiratory therapies. Oncology, urology, and central nervous system therapies also posted double-digit growth.

 

Torrent Pharma, Sun Pharma, and Alkem performed well in terms of domestic sales, according to brokerage Nuvama Wealth. Growth in chronic therapies and consistent field-force additions boosted visibility for sustained domestic growth, Nuvama said. Cipla reported a 6% on-year growth in India sales, which account for nearly 44% of its consolidated sales. Growth came mainly from chronic, cardiac, and consumer health businesses.

 

In emerging markets and Europe, Dr. Reddy's, Zydus, and Cipla performed strongly with healthy earnings growth. Dr. Reddy's reported an 18% sales growth in emerging markets. Its Europe sales surged 142%, led by acquired nicotine replacement therapy and contributions from new launches. Cipla reported an 8% growth and Zydus posted a 37% on-year growth, in emerging market sales.

 

After 2-3 quarters of steady growth, Indian pharmaceutical companies saw softness in the active pharmaceutical ingredients business during the June quarter. However, Divi's Laboratories Ltd., which also provides contract research, development, and manufacturing services, showed resilience, though it missed Street estimates narrowly.

 

HEALTHCARE SECTOR

Among healthcare companies, Apollo Hospitals' June quarter performance was led by improved average revenue per inpatient and reduced costs on its digital platform Apollo 24/7, even as the company continues to face the issue of improving its occupancy ratio. Max Healthcare Institute reported the strongest net profit growth in eight quarters, though the profit was below analysts' consensus estimates. The company posted a marginal 1% on-year increase in average revenue per occupied bed.

 

Looking ahead, growth visibility remains stronger in domestic and emerging markets, supported by healthy therapy demand and an expanding field force. Most companies expect double-digit growth from emerging markets, while the US outlook hinges on policy changes such as tariffs and pricing. Glucagon-like peptide-1, or GLP-1, remains a key factor to watch in 2025-26 (Apr-Mar), with large generic players preparing for a wave of product launches that could provide the next leg of growth.

 

The following table shows the performance of the 14 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	Apr-Jun PAT growth excluding exceptional items %	Adjusted YoY PAT growth estimate %	Revenue beat analysts' estimate	Revenue YoY growth %	Revenue YoY growth estimate %
Pharma & healthcare sector	Yes	5.4	3.94	No	10.1	11.52
Nifty 200	No	9.95	10.30	Yes	5.64	2.11
Alkem Laboratories Ltd.	Yes	19.48	-7.86	Yes	11.19	5.79
Apollo Hospitals Enterprise Ltd	Yes	41.81	21.18	Yes	14.88	12.54
Aurobindo Pharma Ltd.	No	-10.28	-0.72	No	3.98	7.53
Biocon Ltd.	No	-95.00	-84.20	No	14.83	15.54
Cipla Ltd.	Yes	10.19	4.40	No	3.94	4.95
Div's Laboratories Ltd.	No	29.53	39.55	No	14.25	20.16
DR.Reddy's Laboratories Ltd.	No	1.85	11.15	No	11.38	13.54
Lupin Ltd.	Yes	52.13	39.35	No	11.93	15.77
Mankind Pharma Ltd.	No	-18.30	-16.69	No	24.50	24.66
SUN Pharmaceutical Industries Ltd.	Yes	9.67	5.37	Yes	9.47	7.71
Torrent Pharmaceuticals Ltd.	No	19.91	30.58	Yes	11.16	10.27
Max Healthcare Institute Ltd.	No	30.35	58.15	No	31.41	57.53
Glenmark Pharmaceuticals Ltd.	Yes	8.77	8.12	No	0.62	10.80
Zydus Lifesciences Ltd.	No	3.30	-3.92	Yes	5.90	5.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the net profit margin of pharmaceuticals and healthcare companies excluding exceptional items:

 

	PAT Margin for Jun-25	PAT Margin for Jun-24	PAT Margin for Mar-25
Nifty 200	11.96%	11.49%	12.39%
Pharma & healthcare sector	NA	NA	NA
Company	PAT Margin for Jun-25	PAT Margin for Jun-24	PAT Margin for Mar-25
Alkem Laboratories Ltd.	19.70%	17.98%	9.73%
Apollo Hospitals Enterprise Ltd	7.41%	6.00%	6.97%
Aurobindo Pharma Ltd.	10.48%	12.15%	10.78%
Biocon Ltd.	0.80%	19.22%	7.80%
Cipla Ltd.	18.65%	17.59%	18.16%
Div's Laboratories Ltd.	23.63%	20.84%	26.30%
DR.Reddy's Laboratories Ltd.	16.54%	18.09%	18.68%
Lupin Ltd.	19.45%	14.31%	13.63%
Mankind Pharma Ltd.	12.28%	18.71%	13.66%
SUN Pharmaceutical Industries Ltd.	16.35%	22.21%	16.56%
Torrent Pharmaceuticals Ltd.	17.24%	15.98%	16.83%
Max Healthcare Institute Ltd.	15.19%	15.31%	16.70%
Glenmark Pharmaceuticals Ltd.	1.44%	10.49%	0.14%
Zydus Lifesciences Ltd.	22.31%	22.87%	17.94%

 

End

 

US$1 = INR 87.40

Data compiled by Vinod Bhovad
Edited by Tanima Banerjee

 

 

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