Pharma Sector Q3FY26: Revenue Steady, Profits Lag Amid US Pressure & Rising Costs

• Indian pharma companies anticipate steady 8-9% year-on-year revenue growth in Q3FY26, driven by domestic formulations and speciality portfolios.
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) growth is expected to be muted due to price erosion in the US generics market and increasing operating costs.
• The US generics market faces challenges from a high base for oncology drugs and continued pricing pressure, impacting companies like Dr Reddy’s Laboratories and Cipla.
• Lupin is projected to outperform peers, benefiting from strong product traction and limited competition in certain molecules, alongside its robust chronic therapies in India.
• Ajanta Pharma and Eris Lifesciences are forecast for double-digit growth, while Divi’s Laboratories and Laurus Labs expect around 15% growth from export recovery and new contracts.

Why It Matters: Pharma companies see stable revenue growth but face profit challenges from US market pressures and rising operational costs.