Domestic formulations, chronic therapies to drive Pharma Q1; US generics remain drag

The healthcare sector is expected to report a robust growth in domestic formulations, strong traction in chronic therapies and steady demand across emerging markets for the June 2026 quarter. While companies with limited dependence on the US generics market are likely to deliver broad-based growth, those that benefited from gRevlimid earlier are expected to face pressure from a high base and continued pricing erosion.

Specialty products, biosimilars and new launches are expected to remain key growth drivers, while margins may contract due to higher costs. Hospitals are likely to continue outperforming, supported by capacity additions and improving occupancy though margins may be impacted by new facility ramp-up costs.

Sun Pharmaceutical Industries is expected to report double-digit revenue growth, driven by strong performance in India and other emerging markets while the US business may grow in mid-single digit. The specialty portfolio led by Leqselvi and Unloxcyt is expected to remain a key growth driver. Margins may face pressure from higher costs. Progress on the Organon portfolio integration will be the key monitorable.


Aurobindo Pharma is likely to post revenue growth of around 15% year-on-year, supported by biosimilars, injectables and strong European market performance. While the US business may remain subdued due to lower gRevlimid sales, healthy growth in antiretroviral (ARV) businesses, Europe and RoW markets could provide support. Key monitorables include the Lannett integration, offtake from the Pen-G facility and resolution of USFDA observations at Eugia III plant.

Dr. Reddy's Laboratories is expected to report a weak quarter. Revenue may decline in the mid-single digits as the absence of meaningful gRevlimid sales weighs on the US business. Growth in India, Europe, Russia and other emerging markets may only partly offset the US weakness. Margins are likely to remain under pressure, while semaglutide ramp-up in Canada and resolution of USFDA observations at its biologics facility will remain the key focus areas.

Lupin is expected to be among the stronger performers, aided by resilient US sales supported by delayed competition for g-Tolvaptan, and continued traction in Mirabegron. Domestic formulation business is likely to be aided by strong demand in chronic therapies including cardiac, respiratory and anti-diabetic segments.

Cipla is expected to report a muted quarter as a sharp decline in US sales offsets healthy domestic growth. Strong demand in respiratory, cardiac and anti-diabetic therapies should support the India business, but weak US performance and elevated costs are likely to weigh on margins. Key monitorables include the Tirzepatide partnership with Eli Lilly, offtake of g-Ventolin, and progress in the respiratory and oligonucleotide pipelines.

Apollo Hospitals Enterprise is expected to deliver strong double-digit growth in revenue and operating profit before depreciation and amortisation (EBITDA), driven by healthy momentum in mature hospitals, new facility ramp-up and continued improvement in Apollo HealthCo.

Torrent Pharmaceuticals is likely to report strong growth, aided by robust domestic formulations performance and the consolidation of JB Chemicals & Pharmaceuticals. Divi's Laboratories is expected to post double-digit revenue growth, led by continued strength in its custom synthesis business and steady generics demand. Margins could improve on a favourable business mix.