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Domestic Pharma maintains strong growth trajectory, strong levers in place for sustainability

ICICIdirect Research 11 Sep 2026 DISCLAIMER

Amid market volatility, Pharma stocks have remained resilient with Nifty Pharma up almost ~20% since April. One of the key reasons we believe would be the growth consistency in the domestic Pharma market.
Domestic Pharmaceuticals registered a strong growth of 13% for the month of August 2026 on YoY basis to ₹ 24,827 crore. This performance has been consistently in the range of 12-15% over the past 6 months or so.
Chronic therapies which are life-long in nature, grew 16% during the month whereas Acute therapies which are seasonal and incidental, grew 11%.
Highest growth amongst covered top listed players during the month as per the data was recorded by Dr. Reddys - 22%; Ajanta Pharma - 20%; Zydus, Torrent– 16%, Lupin – 15%; Sun Pharma – 14%; Emcure & IPCA – 13%and Abbott India – 11%.
On a trailing twelve months basis, the growth stood at ~12% to ₹ 2,71,284 crore, which is trending well above the 7-9% range of expectations by various industry experts. Dissecting this ~12% growth- ~6% through price hikes, ~3% through new introductions and ~3% through volumes (note that the volume growth was flat in the last 2 years).
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 ongoing 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 (~25% of the IPM) for established domestic players.
Top picks with a strong focus on domestic formulations with higher chronic contribution - Torrent Pharma - ₹5920, Zydus Lifesciences - ₹1315, RPG Life Science - ₹3205 and Emcure Pharma- ₹2305.

 

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