Domestic branded formulations, innovative medicines and emerging markets are increasingly cushioning major Indian drugmakers against volatility and pricing pressure in US generics.
An analysis of the first quarter numbers (of the financial year 2026-27) of Sun Pharma, Aurobiondo Pharma and Dr Reddy’s Laboratories show that business in India and emerging markets powered the sector’s growth amid a general slowdown in the US market.
The Q1 performance of these drugmakers show divergence as Sun Pharma and Aurobindo Pharma posted strong revenue growth, while Dr Reddy’s Laboratories suffered a sharp earnings decline on account of lower lenalidomide sales and a semaglutide-related provision.
Sun Pharma remained the largest of the three, with Q1 FY27 sales rising 10 per cent year-on-year to ₹15,184 crore. EBITDA increased at a slower 2.7 per cent to ₹4,418 crore, while the margin contracted to 28.9 per cent from 31.1 per cent. Reported net profit rose to ₹2,895 crore from ₹2,279 crore, though adjusted profit grew only 3.1 per cent to ₹3,089 crore.
Sun’s growth was driven by India formulations, which expanded 16 per cent to ₹5,475 crore, and Global Innovative Medicines, where sales rose 12.8 per cent to $351 million. Innovative medicines contributed 21.9 per cent of total sales, underscoring the company’s continuing shift towards higher-value products. Emerging-market sales grew 4.2 per cent to $311 million. However, US formulations declined 9.7 per cent to $427 million as growth in innovative medicines only partly offset weakness in generics.
Aurobindo Pharma recorded the fastest overall growth with a 16.3 per cent increase in total revenue to to ₹9,150 crore, while EBITDA increased 20 per cent to ₹1,924 crore. Its EBITDA margin improved by 60 basis points to 21 per cent, and net profit surged 25 per cent to ₹1,032 crore.
Dr Reddy’s reported a contrasting performance as revenue fell 5.6 per cent to ₹8,071 crore, EBITDA dropped to ₹1,009 crore from ₹2,278 crore, and profit attributable to shareholders declined 69 per cent to ₹444 crore. North America revenue plunged 35 per cent to ₹2,205 crore, largely due to lack of lenalidomide sales.
The Hyderabad-based company also recognised a ₹240-crore provision relating to semaglutide API, reducing margins by about three percentage points. Nevertheless, its underlying diversification gained momentum: emerging markets grew 31 per cent, India 17 per cent and Europe 13 per cent.
Overall, the quarter demonstrates that domestic branded formulations, innovative medicines and emerging markets are increasingly cushioning Indian drugmakers against volatility and pricing pressure in US generics.
Published on August 9, 2026