Drug companies set for improved revenue growth in June quarter amid US market challenges

ET Intelligence Group: Select companies in the pharma and healthcare sector are expected to show improved revenue and profit for the June 2025 quarter driven by a strong growth in the domestic market. Some companies may face pricing pressure in the US market due to sequentially lower Revlimid sales, used for the treatment of myeloma (a type of blood cancer). The performance for hospital chains may improve driven by a jump in operational beds.

Sun Pharmaceutical Industries' revenue may grow in mid-single digit year-on-year, driven by market share gains in existing products. While the domestic business is expected to show traction, the US sales may moderate due to heightened competition in gRevlimid.

Dr Reddy's Laboratories domestic business is expected to grow on the back of rise in respiratory/derma segment. US revenue is highly dependent on the company's ability to book revenues through gRevlimid. Margin could decline slightly.

Aurobindo Pharma's revenue is expected to be modest on the back of decline in US sales. Penicillin-G plant's capacity utilisation improvement could drive the growth in future quarters. Margins are expected to be flattish.

For Cipla, US sales are expected to decline due to a price fall for gRevlimid, slight sequential drop in inhaler sales, which may be partially offset by higher Lanreotide sales. Margins may decline by 80 basis points.

Lupin's revenue is expected to grow more than peers, driven by strong growth in the US business amid new launches and increased contribution from existing products. Margins are also expected to expand by around 800 basis points.

Apollo Hospitals Enterprise may report double digit growth in revenue and profit amid stable occupancy and higher revenue per bed. In addition, Keimed, a pharma distribution company,which Apollo acquired in 2024 is likely to support the overall margin performance.