ANALYSIS
Q2 PAT growth of pharma, healthcare cos best in 5 quarters
This story was originally published at 13:06 IST on 26 November 2025
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By Narayana Krishna
HYDERABAD - Pharmaceutical and healthcare companies delivered a strong earnings performance in the September quarter, supported by stable US generic pricing, improved domestic demand in key therapies, and easing input cost pressure. Growth in Europe and emerging markets, as well as growth in biosimilar and high-value bulk drugs contributed to the strong performance during the quarter. Growth in these companies' net profit was the highest in five quarters and revenue growth was at a nine-quarter high.
The 14 pharmaceutical and healthcare companies in the Nifty 200 index reported aggregate on-year growth of 31.43% in net profit in the September quarter, excluding exceptional items, surpassing the consensus estimate of a 9.96% rise. These companies delivered aggregate on-year revenue growth of 16.04% in Jul-Sept, much higher than the consensus estimate of 10.62%.
Out of these 14 companies, 11 surpassed the consensus estimates of analysts for net profit growth and revenue growth in the September quarter. The pharma and healthcare sector's aggregate performance is also above the NSE 200 companies' overall net profit growth of 11.8%. In terms of revenue growth, these companies' 16% growth outperformed the NSE 200 companies' overall revenue growth of 7.77% for the quarter.
The significant boost to the sector's aggregate net profit was primarily led by a $525-million one-time revenue recognition by Glenmark Pharmaceuticals Ltd. But even excluding Glenmark, the other 13 companies' aggregate net profit and revenue growth was 17.67% and 13.08%, respectively. This was not only higher than the consensus estimate, but also far above the Nifty 200 index companies' aggregate performance.
STRONG SHOW
Lupin Ltd. and Zydus Lifesciences Ltd in generics, Divi's Laboratories Ltd. in high-value bulk drugs and specialty chemicals, and Biocon Ltd. in the biologics segment reported robust earnings growth for the September quarter, beating the Street's expectations.
With an over 73% on-year rise in net profit, Lupin announced an upward revision to its 2025-26 (Apr-Mar) margin guidance. The company reported a 47% on-year jump in its North America sales, led by specialty products and stable pricing. Zydus Life reported growth across markets, including its consumer wellness business in India. While mid-cap pharmaceutical company companies such as Torrent Pharmaceuticals Ltd. and Alkem Laboratories Ltd posted double-digit growth in their September quarter earnings, heavyweights such as Dr. Reddy's Laboratories Ltd. reported single-digit growth.
Sector heavyweight Cipla reported weak single-digit growth in its September quarter earnings. The company, which is undergoing a transition in leadership, projected a cautious guidance for FY26 with a cut in its operating margins.
Aurobindo Pharma, which is struggling with regulatory issues and the shutdown of its Penicillin-G plant, reported low single-digit growth in both net profit and revenue for the September quarter. The company's net profit growth was at a three-quarter low. However, Aurobindo Pharma is optimistic about a revival in growth, backed by traction in its biosimilar business and resolution of regulatory issues at its injectables arm's unit-III, which is expected to go for a reinspection. Mankind Pharma, which is in the process of integrating its acquired business Bharat Serum Vaccines Ltd., posted its poorest earnings performance in the last four quarters.
Mankind Pharma, Cipla, Glenmark, and other India-focused pharmaceutical companies were impacted by the recent cut in goods and services tax. Inventory adjustments and the return of stocks in some cases impacted the India sales growth of these pharmaceutical companies.
Though one-off revenue in the US led by a licensing deal with AbbVie lifted Glenmark's September quarter numbers, its India sales declined 87% on year due to GST-related inventory adjustments and the impact of the transition to revised rates.
HEALTHCARE
The net profit growth of healthcare majors Apollo Hospitals Enterprise Ltd. and Max Healthcare Institute Ltd. for the September quarter was more than estimated.
However, Apollo Hospitals' Jul-Sept net profit growth was at an eight-quarter low, while revenue growth was at a 13-quarter low due to slow growth in its core hospitals business. For the reporting quarter, the company's hospitals segment revenue grew 10% on year, mainly on account of low growth in medical admissions and because occupancy fell to 69% from 73% a year ago.
Max Healthcare, which has significant exposure to north India, reported robust 74% growth in net profit, aided by a one-off tax write-back. However, Max Healthcare's revenue rose only 25% on year, below estimates and the slowest in the last four quarters.
Dr. Reddy's, Lupin, Cipla, Aurobindo Pharma, Glenmark, and Divi's Laboratories have projected robust growth in earnings and margins in the coming quarters as growth in the US, Europe, and emerging markets is likely to help these companies. As the threat of tariffs has faded somewhat, the generics pricing environment in the US for Glucagon-like peptide-1, or GLP-1, products will be a key factor that will influence these companies' earnings performance.
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 |
Jul-Sept |
Adjusted YoY PAT |
Revenue beat analysts' estimate |
Jul-Sept |
Revenue YoY |
|
Pharma & healthcare sector |
YES |
31.43 |
9.96% |
YES |
16.04 |
10.62% |
|
Nifty 200 |
Yes/NO |
11.8 |
9.7 |
Yes/NO |
7.77 |
7.8 |
|
APOLLO HOSPITALS ENTERPRISE LIMITED |
YES |
25.98 |
18.85 |
YES |
12.78 |
11.44 |
|
CIPLA LIMITED |
NO |
3.73 |
6.89 |
YES |
7.64 |
5.31 |
|
DR.REDDY'S LABORATORIES LTD |
NO |
7.28 |
11.85 |
YES |
9.83 |
8.23 |
|
SUN PHARMACEUTICAL INDUSTRIES LIMITED |
YES |
2.56 |
-3.15 |
YES |
8.93 |
7.22 |
|
DIVI'S LABORATORIES LIMITED |
YES |
34.36 |
16.10 |
YES |
15.55 |
13.42 |
|
TORRENT PHARMACEUTICALS LTD |
YES |
33.33 |
32.45 |
YES |
14.30 |
10.94 |
|
ZYDUS LIFESCIENCES LIMITED |
YES |
41.93 |
16.94 |
YES |
16.92 |
12.81 |
|
ALKEM LABORATORIES LIMITED |
YES |
11.10 |
7.03 |
YES |
17.17 |
10.27 |
|
AUROBINDO PHARMA LTD |
NO |
3.80 |
9.77 |
NO |
6.28 |
3.94 |
|
BIOCON LIMITED |
YES |
N.A. |
N.A. |
YES |
19.64 |
16.64 |
|
GLENMARK PHARMACEUTICALS LIMITED |
YES |
463.35 |
2.44 |
YES |
76.10 |
4.89 |
|
LUPIN LIMITED |
YES |
73.34 |
36.59 |
YES |
24.23 |
14.95 |
|
MANKIND PHARMA LIMITED |
YES |
-22.01 |
-25.77 |
NO |
20.77 |
21.85 |
|
MAX HEALTHCARE INSTITUTE LIMITED |
YES |
74.34 |
48.45 |
NO |
25.07 |
52.02 |
The following table shows the net profit margin of pharmaceuticals and healthcare companies excluding exceptional items:
|
PAT Margin for Sept-25 |
PAT Margin for Sept-24 |
PAT Margin for Jun-25 |
|
|
Nifty 200 |
11.96% |
11.49% |
12.39% |
|
Pharma & healthcare sector |
NA |
NA |
NA |
|
Company |
PAT Margin for Sept-25 |
PAT Margin for Sept-24 |
PAT Margin for Jun-25 |
|
APOLLO HOSPITALS ENTERPRISE LIMITED |
7.57% |
6.78% |
7.41% |
|
CIPLA LIMITED |
17.80% |
18.47% |
18.65% |
|
DR.REDDY'S LABORATORIES LTD |
15.26% |
15.62% |
16.54% |
|
SUN PHARMACEUTICAL INDUSTRIES LIMITED |
21.54% |
22.87% |
22.36% |
|
DIVI'S LABORATORIES LIMITED |
26.17% |
22.50% |
23.63% |
|
TORRENT PHARMACEUTICALS LTD |
18.29% |
15.68% |
17.24% |
|
ZYDUS LIFESCIENCES LIMITED |
21.11% |
17.39% |
22.31% |
|
ALKEM LABORATORIES LIMITED |
19.12% |
20.17% |
19.32% |
|
AUROBINDO PHARMA LTD |
10.24% |
10.48% |
10.48% |
|
BIOCON LIMITED |
2.24% |
-1.17% |
1.23% |
|
GLENMARK PHARMACEUTICALS LIMITED |
33.00% |
10.32% |
11.34% |
|
LUPIN LIMITED |
20.97% |
15.03% |
19.45% |
|
MANKIND PHARMA LIMITED |
13.84% |
21.42% |
12.28% |
|
MAX HEALTHCARE INSTITUTE LIMITED |
23.01% |
16.50% |
15.19% |
US$1 = INR 89.26
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Data Compiled by Vinod Bhovad
Edited by Avishek Dutta
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