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Domestic Pharma growth remains in a sweet spot; significant tailwinds ahead

ICICIdirect Research 12 Jun 2026 DISCLAIMER

Amid the volatility in the markets for the obvious reasons, Pharma stocks have remained resilient with Nifty Pharma up almost ~9% since March. One of the key reasons we believe would be the growth consistency of the domestic Pharma market.
Domestic Pharmaceuticals registered an impressive growth of 12.1% for the month of May 2026 on YoY basis to ₹ 22,835 crore. This was on the heels of ~13% YoY growth for the month of April 2026 and ~11% growth in March 2026.
Therapy wise, Vitamin and cardiac posted highest growth of 16% and 15% respectively followed by anti-diabetics at 14% and Gynecology at 11%.
Chronic therapies which are life-long in nature, grew 15% during the month whereas Acute therapies which are seasonal and incidental, grew 10%.
Highest growth amongst covered top listed players during the month as per the data was recorded by Lupin - 17%; Torrent Pharma - 15%; Sun Pharma, P&G Health, Cipla -14% each and Dr Reddy - 13%.
On a trailing twelve months basis, the growth stood at ~11% to ₹ 2,61,691 crore, which is trending well above the 7-9% range of expectations by various industry experts. Dissecting this ~11% growth- ~5% through price hikes, ~3% through volumes and ~3% through new introductions.
Qualitatively, the growth has been driven by increased patient volumes, higher offtake of high-value brands (such as anti-diabetic), increased penetration of players into tier II-VI towns via MRs and distributors addition and continued traction from chronic therapies in general and Cardiology / Diabetology in particular.
We expect domestic Pharma to remain in good stead with multiple tailwinds. Besides the growing instances of lifestyle related diseases which support the growth in diabetology and cardiovascular, we expect decent opportunities panning from the new-aged obesity drugs.
With the impending implementation of schedule M by the government, which mandates stricter manufacturing norms, we expect non-compliant small players to vacate the manufacturing space. We believe this provides additional opportunity of ₹75,000 crore (~30% of the IPM) for established domestic players.
Top picks with a strong focus on domestic formulations - Torrent Pharma - ₹5100 , DRL - ₹1460 , Ajanta Pharma - ₹3520.

 

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