Indian Pharma Q3 Outlook: Domestic Formulations to Counter US Pricing Pressure
Indian pharmaceutical companies face mixed Q3 performance with domestic formulations and specialty launches driving growth amid US pricing pressure. Sun Pharma and Lupin are expected to lead with specialty gains, while Cipla and Dr Reddy's may face US market challenges. Divi's Labs anticipates double-digit growth from custom synthesis operations.
*this image is generated using AI for illustrative purposes only.
Indian pharmaceutical companies are preparing for a mixed third quarter, with domestic formulations and specialty drug launches expected to offset challenges from US pricing pressure. The sector outlook suggests varied performance across different segments, with some companies better positioned to navigate market headwinds than others.
Sector Performance Overview
The US generics segment is anticipated to benefit from new product launches, while contract research, development, and manufacturing organization (CRDMO) and active pharmaceutical ingredient (API) segments may deliver mid-single-digit growth. Domestic formulations are emerging as a key growth driver, supported by new product introductions and market expansion strategies.
Company-Specific Outlook
Sun Pharmaceuticals
Sun Pharma's revenue is expected to grow in the mid-single digits, driven by specialty and domestic segments. The company is positioned to outperform industry growth, aided by stronger performance in domestic formulation sales due to new product launches. However, US sales are expected to decline given lower Revlimid sales, though Sun Pharma is anticipated to be among the least affected pharmaceutical companies in this regard.
Dr Reddy's Laboratories
Dr Reddy's Laboratories is expected to post muted performance in the third quarter, weighed down by pricing pressure and lower contribution from key products in North America. The domestic business is likely to remain strong, supported by traction in vaccines, cardiac, and pain therapies. Key factors to monitor include progress on GLP-1 approvals, biosimilar filings, and developments around potential partnerships in the US market to mitigate tariff-related risks.
Other Major Players
| Company | Expected Performance | Key Drivers |
|---|---|---|
| Aurobindo Pharma | Modest growth | Improving injectables traction, European portfolio diversification |
| Cipla | Moderate growth | Domestic market expansion, new launches including Yurpeak |
| Lupin | Strong quarter | US business traction from Tolvaptan and Mirabegron |
| Divi's Laboratories | Double-digit growth | Custom synthesis operations |
Regional Market Dynamics
Aurobindo Pharma is expected to deliver modest performance, supported by improving traction in injectables, even as pricing pressure on key products weighs on growth. The European business might continue to expand based on portfolio diversification and enhanced supply reliability, while emerging markets are likely to remain flat. The domestic formulations business is expected to benefit from differentiated product offerings.
Cipla is anticipated to deliver moderate growth in the third quarter, helped by high single-digit growth in the domestic market and new launches such as Yurpeak, a Type 2 diabetes drug. The US business is likely to remain weak due to pricing pressure and higher competition in key products, though this may be partly offset by incremental gains in select therapies such as Abraxane and Albuterol.
Market Outlook
Lupin is expected to deliver a strong quarter, supported by sustained traction in the US business from Tolvaptan and Mirabegron drugs. The overall sector performance will largely depend on companies' ability to leverage domestic market opportunities while managing challenges in international markets, particularly the US generics segment.
17
