US generic drugs, domestic market, to drive healthy sales growth in pharmaceutical companies in the fourth quarter
In the coming months, uncertainty over U.S. tariffs and limited competition periods for universal Revlimid in U.S. looms end. However, analysts expect higher sales from Revlimid to drive growth with Aurobindo Pharma Ltd, Dr. Reddy’s Laboratory Ltd and Sun Pharmaceutical Industries Ltd and the next fiscal growth in the first quarters.
“We expect good coverage of our pharmaceutical coverage, led by continued stable U.S. generic drug pricing and the attractiveness of most other markets, with slow domestic growth in January and February,” said analysts at Kotak Institution Equities. They expect year-on-year sales growth of about 11% and EBITDA growth of about 17%.
JM Financial has similar estimates.
“They will bring 10-11% top line growth… Usually, the fourth quarter is a gentle quarter for some pharmaceutical companies with Indian exposure, especially in acute conditions. [segment],” said Amey Chalke, a pharmaceutical research analyst at JM Financial. Mint. “Companies with strong exposure in the United States usually perform well in the fourth quarter.”
Revlimid, U.S. generic drug growth
include Reddy’s, Cipla, Sun Pharma, Zydus Lifesciences, Natco Pharma and Aurobindo Pharma have cashed in a universal version of $8 billion in blood cancer drugs, with the U.S. distribution of limited numbers in the U.S. since March 2022, and since 2026, the company will analyze Qlims forly the Pressive the Drive for Live the 2026 in January 2026. quarterly.
“Many of these companies benefited from Revlimid in the United States, especially. So, while Revlimid also existed in the last quarter, we expect sales in this quarter than last year,” Chalk said.
However, price erosion and quarterly volatility are expected.
“We expect quarterly volatility in Grevlimid revenue to increase … We expect price erosion as most companies intend to sell allocated volumes by September 2025,” Nomura analysts said in a note.
Analysts point out that Revlimid sales for Zydus and Sun Pharma may increase in turn, but Dr. Reddy may decline. Nomura analyst PEG sales rose 13% in the fourth quarter.
Analysts will also focus on the launch of products that the company is queuing for in FY26 to compensate for lost revenue due to the loss of Revlimid exclusivity. It is estimated that most companies will make some corrections to their profitability after the exclusive period.
In addition to Revlimid, the overall U.S. drug has driven the company’s growth.
“We noticed that in 4QFY25F, QQs from Zydus, Sun Pharma, Lupine and Cipla significantly increased QQ, and Dr. Reddy’s exports decreased,” Nomura analysts said. “In addition to Gravelin, we believe QQ U.S. sales are on other product-specific opportunities in 4QFY25F on Zydus (Sitagliptin) and Lupine (Mirabegron, Predforte, gxarelto).
Although the United States currently exempts drugs from reciprocity tariffs, President Donald Trump has repeatedly stated that it would impose “main” tariffs on drug imports, raising concerns among Indian exporters. Analysts at Kotak Institutional Stocks said any comments on the hit rate of the company’s steps to mitigate potential tariffs this quarter are key to monitoring.
Softer domestic quarter
Domestic growth in the fourth quarter is usually weak, especially for stronger drugmakers In the acute treatment section, to treat short-term, serious diseases such as respiratory illness, cough and cold. Nomura analysts say growth of respiratory and anti-infective drugs is expected to slow down, while heart and stomach medications may outperform.
Although organic domestic growth may be slower, the company’s overall domestic growth is expected to benefit from acquisitions and licensing transactions. Kotak analysts expect domestic sales of its covered companies to be 7% to 18% year-on-year.
“In our coverage, while a handful of declines in January and February, domestic sales of 4QFY25 from companies such as Cipla, Reddy’s, Emcure and JB Chemicals will benefit from the past few quarters,” analysts noted.
