Indian Pharma Sector Poised for 19.4% Earnings Growth in Q3 FY25: Report

Robust Domestic Sales, Niche US Launches, and Lower Raw Material Costs Drive Profitability in Pharma and Healthcare Sector

New Delhi, January 7: India’s pharmaceutical sector is set to report healthy earnings growth of 19.4% year-on-year for the October-December quarter (Q3 FY25), driven by robust domestic formulation (DF) sales, niche US generic launches, and declining raw material costs, according to a report by Motilal Oswal Financial Services.

Strong Sales and Profit Growth Expected

Aggregate sales of domestic pharmaceutical companies are expected to grow 10% YoY to ₹787 billion, with domestic formulation sales witnessing a 16.2% increase to ₹209 billion. EBITDA, a key profitability measure, is projected to grow by 16.8% YoY to ₹188 billion, while profit after tax (PAT) is expected to rise by 19.4% YoY to ₹117 billion.

Motilal Oswal’s report highlighted that growth is driven by higher domestic demand, a niche product portfolio in the US market, and cost efficiencies from lower raw material prices.

Segment-Wise Performance Highlights

• Domestic Market: Growth in the domestic market is primarily fueled by cardiac, dermatology, urology, and anti-diabetic therapies, outpacing the Indian Pharmaceutical Market (IPM) growth rate of 7% YoY.
• US Market: US pharmaceutical sales are estimated to grow by 5.3% YoY to USD 2.4 billion. However, after eight consecutive quarters of double-digit growth, sales may moderate due to limited new product launches and increased competition in base products.
• Hospitals: Profitability in the hospital segment is anticipated to improve with the addition of new beds and increased patient volumes.

Therapy Trends and Challenges

While cardiac, dermatology, and anti-diabetic therapies showed impressive growth, respiratory, anti-infective, and gynaecological therapies experienced moderate growth, slightly impacting overall sector performance.

Key Players in Focus

Prominent pharmaceutical and healthcare players covered in the report include:

• Sun Pharma
• Cipla
• Dr. Reddy’s Laboratories
• Zydus Lifesciences
• Apollo Hospitals
• Max Healthcare
• Lupin
• Mankind Pharma

Outlook for Pharma Sector

The report concluded that India’s pharmaceutical sector remains well-positioned for sustainable growth, driven by favorable macroeconomic factors, strong domestic demand, and increased financial inclusion.

With policy support, innovative product launches, and cost optimization, Indian pharma companies are set to maintain their growth momentum in the upcoming quarters.