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Informist, Tuesday, Jun. 9, 2026

 

By Gunjan Rajput

 

NEW DELHI – Aggregate adjusted net profit of 15 pharmaceutical and healthcare companies in the Nifty 200 index declined in the March quarter for the first time in 13 quarters, dragged down by a sharp fall in earnings of Cipla Ltd. and Dr. Reddy's Laboratories Ltd. following lower sales of generic Revlimid in the US.

 

The combined net profit, excluding exceptional items, of 15 pharmaceutical and healthcare companies fell 1% on year in the March quarter. However, the fall was slightly slower than analysts' expectations of a 3?cline. The combined revenue of the 15 companies grew over 10% on year, broadly in line with the Street's estimate.

 

Of the 15 companies, Cipla and Dr. Reddy's Laboratories reported a sharp decline in earnings, with net profit falling 55% and 86% on year, respectively, in the March quarter. Excluding Cipla and Dr Reddy's, the aggregate net profit of the remaining 13 companies rose over 21%, significantly higher than analysts' expectations of about 9%. Similarly, revenue of the remaining companies, excluding Cipla and Dr. Reddy's, rose over 15% on year, more than 13% expected by analysts.

 

Several Indian pharmaceutical companies, including Cipla and Dr Reddy's, benefited from highly profitable, volume-restricted settlements that allowed them to sell the generic version of the blood cancer drug Revlimid in the US market prior to 2026. The drug went off patent in January 2026, leading to a surge in competition and severe price erosion, which sharply reduced generic Revlimid revenue and profit margins for these companies.

 

PHARMA
Aggregate net profit of the 12 pharmaceutical companies in the index fell nearly 3% on year, compared with analysts' expectations of a 5?cline. Of the 12 pharmaceutical companies, Cipla, Dr. Reddy's, Torrent Pharmaceuticals Ltd. and Biocon Ltd. reported a decline in earnings. Net profit of Biocon fell 36%, while that of Torrent Pharma's declined 13% on year in the March quarter.

 

Excluding these four companies, the aggregate net profit of the remaining pharmaceutical companies rose about 26% on year, compared with analysts' expectations of around 9%. The weak performance of Cipla and Dr Reddy's was largely due to lower sales of the generic version of Revlimid in the US market.

 

Cipla's revenue from the US fell 26% year-on-year due to lower generic Revlimid contribution and supply challenges with Lanreotide. Dr Reddy's revenue from its US business declined 51% on year due to lower generic Revlimid sales and a one-time inventory adjustment, although the company said its business, excluding Revlimid, was stable.

 

In contrast, Sun Pharmaceutical Industries Ltd.'s US formulation sales were down just over 1% on year for the March quarter. While sales declined marginally in dollar terms, growth in innovative products helped offset weakness in the generics business.

 

Torrent Pharmaceuticals was an exception, with US sales rising 31% on year during the quarter. However, its net profit declined as expenses increased sharply following the integration of JB Chemicals & Pharmaceuticals Ltd. and its subsidiaries. The debt-funded acquisition of a controlling stake in JB Chemicals resulted in Torrent reporting its steepest year-on-year decline in profit in more than eight years.

 

INDIAN MARKET
Domestic formulations remained a key growth driver for most pharmaceutical companies during the quarter. Sun Pharmaceutical's India formulation sales rose 15% on year and accounted for over 33% of the company's consolidated revenue. Growth was driven by the cardiovascular, central nervous system, gastroenterology, and orthopaedics segments. The company also continued to gain market share in India, with a 30-basis-point increase in financial year 2025-26, marking its highest annual market share gain since acquiring Ranbaxy Laboratories Ltd. in 2015.

 

EUROPE, EMERGING MARKETS

Performance in Europe and emerging markets remained strong for most companies, supported by favourable currency movements. Cipla was among the few exceptions, reporting a 9?cline in revenue from its Europe and emerging markets business. In contrast, Lupin Ltd. delivered a robust growth of 50% in these markets, followed by Zydus Lifesciences Ltd. and Aurobindo Pharma Ltd. that saw their revenue rising 45% and 30%, respectively.

 

HEALTHCARE

The healthcare segment, comprising Apollo Hospitals Enterprise Ltd., Max Healthcare Institute Ltd., and Fortis Healthcare Ltd., continued to report growth. The combined net profit of the three companies rose over 21% on year, broadly in line with analysts' estimates. The revenue of these companies increased nearly 17%, slightly below the Street's expectations of 20%. Profit growth for the healthcare companies was similar to that seen in the December quarter. However, excluding three quarters in which aggregate net profit declined, the 21% rise was the slowest profit growth in 16 quarters.

 

Apollo Hospitals reported strong earnings growth, boosted by hospital operations, and the continued expansion of its digital health and pharmacy business. Max Healthcare's earnings growth remained muted because of higher operating costs and largely unchanged occupancy levels, even as it continued to expand its bed capacity. Fortis Healthcare reported its highest revenue in 24 quarters, supported by growth in both healthcare services and diagnostics.

 

LOOKING AHEAD

Going forward, analysts expect pharmaceutical companies to benefit from semaglutide launches, although their contribution to earnings was limited in the March quarter because the products were launched only towards the end of the month.

 

The normalisation of the Revlimid impact, continued growth in domestic formulations, and expansion in speciality products are expected to be the key earnings drivers in the financial year 2026-27 (Apr-Mar).

 

The following table shows the performance of the 15 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	Adjusted PAT beat analysts' estimate	Adjusted PAT YoY growth %	Adjusted PAT YoY growth estimate %	Adjusted PAT beat sector estimate	Adjusted PAT beat Nifty 200 estimate		Revenue beat analysts' estimate	Revenue YoY growth %	Revenue YoY growth estimate %	Revenue beat sector estimate	Revenue beat Nifty 200 estimate
Pharma & Healthcare sector		-0.85	-3.09					10.76	10.05
Nifty 200		15.19	4.68					12.16	13.70
Alkem Laboratories Ltd.	NO	21.44	48.28	YES	YES		YES	14.62	12.61	YES	YES
Apollo Hospitals Enterprise Ltd.	YES	35.86	21.98	YES	YES		YES	18.12	15.38	YES	YES
Aurobindo Pharma Ltd.	NO	1.97	7.48	YES	NO		YES	5.62	4.06	NO	NO
Biocon Ltd.	NO	-36.35	-34.68	NO	NO		NO	2.25	3.02	NO	NO
Cipla Ltd.	NO	-54.61	-41.80	NO	NO		NO	-2.80	-1.18	NO	NO
Divi's Laboratories Ltd.	YES	13.34	4.70	YES	YES		NO	10.13	11.67	YES	NO
Dr. Reddy's Laboratories Ltd.	NO	-86.14	-43.81	NO	NO		NO	-11.51	-3.04	NO	NO
Fortis Healthcare Ltd.	YES	17.22	0.16	YES	YES		YES	17.81	15.10	YES	YES
Glenmark Pharmaceuticals Ltd.	YES	78.77	37.42	YES	YES		NO	15.80	16.26	YES	YES
Lupin Ltd.	YES	106.04	57.52	YES	YES		YES	31.89	22.65	YES	YES
Mankind Pharma Ltd.	YES	34.48	-5.96	YES	YES		YES	11.81	10.89	YES	NO
Max Healthcare Institute Ltd.	NO	7.28	37.64	YES	YES		NO	12.21	37.86	YES	NO
Sun Pharmaceutical Industries Ltd.	NO	8.06	11.86	YES	YES		YES	12.76	12.59	YES	NO
Torrent Pharmaceuticals Ltd.	NO	-12.84	11.76	NO	NO		YES	41.84	32.02	YES	YES
Zydus Lifesciences Ltd.	YES	20.10	-30.21	YES	YES		YES	16.22	5.64	YES	YES

 

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

 

	Adj PAT Margin for Mar-26	Adj PAT Margin for Mar-25	Ajd PAT Margin for Dec-25
Nifty 200	12.84%	12.50%	12.40%
Pharma & Healthcare sector	13.79%	15.40%	16.84%
Alkem Laboratories Ltd.	10.31%	9.73%	18.43%
Apollo Hospitals Enterprise Ltd.	8.01%	6.97%	8.05%
Aurobindo Pharma Ltd.	10.41%	10.78%	11.28%
Biocon Ltd.	4.57%	7.34%	10.48%
Cipla Ltd.	8.48%	18.16%	13.45%
Divi's Laboratories Ltd.	27.07%	26.30%	26.07%
Dr. Reddy's Laboratories Ltd.	2.93%	18.68%	15.16%
Fortis Healthcare Ltd.	11.77%	11.83%	10.58%
Glenmark Pharmaceuticals Ltd.	17.90%	11.59%	15.06%
Lupin Ltd.	21.29%	13.63%	22.35%
Mankind Pharma Ltd.	16.77%	13.95%	14.45%
Max Healthcare Institute Ltd.	15.97%	16.70%	16.89%
Sun Pharmaceutical Industries Ltd.	18.57%	19.38%	24.86%
Torrent Pharmaceuticals Ltd.	10.84%	17.64%	19.53%
Zydus Lifesciences Ltd.	22.01%	21.30%	16.42%

 

End

Data Compiled by Vinod Bhovad

Edited by Akul Nishant Akhoury

 

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