Quick Summary
India's pharmaceutical sector is expected to post moderate growth in the second quarter (Q2) of FY 2025-26, as the industry navigates a complex mix of domestic tax adjustments, global pricing pressures, and selective product gains. While new product launches and steady biosimilar sales offer some relief, headwinds from the recent GST rate revisions and weakness in the US generics segment could weigh on overall performance. Domestic Pharma Growth May Slow Slightly After GST Rate Revision Acco
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FAQ :
The Indian pharma market is projected to grow around 10% year-on-year, but a 50-200 basis point impact is likely from lower primary sales due to GST rate changes.
GST rate changes implemented in September 2025 are expected to cause a slowdown in domestic sales for some companies, particularly those focused on acute treatments.
The US generics segment anticipates flat growth due to the decline in sales of high-margin drugs like gRevlimid and continued price erosion in established products.
Chronic-focused companies such as Sun Pharma, Torrent Pharmaceuticals, and Zydus Lifesciences are expected to outperform, while acute-heavy firms may see slower growth.
The API and CDMO segments are likely to record high single-digit growth, driven by companies like Divi's Laboratories and Laurus Labs, although some may face muted numbers due to inventory destocking.
Analysts describe Q2 FY26 as a 'transition quarter' with volatility, expecting the GST impact to be reflected but to reverse in the following quarter.
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