Domestic dose may ease US drag for pharma firms

Sector likely to see double-digit growth in FY25 as tariff headwinds loom

- SOHINI DAS

As the Indian drug industry braces for the impact of potential US tariffs, the sector is likely to end 2024-25 with revenue growth of 11-16 per cent, said several brokerages.

According to them, this would largely be led by domestic formulations growth as US sales are expected to see a moderate rise.

Their profit after tax (PAT) is estimated to grow in the range of 10-18 per cent.

Nuvama Institutional Equities said therapies like antidiabetic, anti-infective and respiratory had underperformed in the Indian pharma market.

The pharma market grew by 6 per cent in Q4FY25, while the above therapies have grown in the range of 2.6-5.6 per cent.

However, companies like Dr Reddy's Laboratories (DRL) (up 15 per cent), Ipca (13 per cent) and Torrent Pharma (12 per cent) may outperform the pharma market.

Nuvama coverage companies — on an average — are likely to post domestic sales growth of 10 per cent year-on-year (Y-o-Y).

As for the US market, generic Revlimid (cancer drug) offtake is expected, and US sales for Nuvama coverage universe is likely to grow 8 per cent, with Lupin and Zydus Lifesciences expected to witness high-teens growth.

Zydus and Aurobindo will be key beneficiaries of generic Revlimid.