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Pharma Q3 results early trend- Weak numbers from DRL and Cipla but work in interesting launches in complex and niche products

ICICIdirect Research 30 Jan 2026 DISCLAIMER

Revenues reported by both Cipla and DRL followed a common pattern- weak US sales due to diminishing sales of anti-cancer drug Revlimid but strong India traction on account of higher chronic sales.
For DRL the revenue growth was modest at 4% YoY to ~₹ 8750 crore. While India grew 19% YoY, the growth was neutralized by a 12% de-growth in the US. 
Cipla also reported flat quarter at ₹6,963 crore.  while India grew 10% YoY, the US declined 22% YoY.  Here also the decline was due to lower traction from Revlimid besides supply constraints for one more niche product. 
That said, the medium-term outlook remains constructive. Both companies have strong launch pipelines. While DRL has three major biosimilars planned for the US and Europe over the next two to three years, Cipla is gearing up for eight US launches over the next 6 to 18 months, across respiratory and peptide segments. These launches are expected to offset the Revlimid decline to a greater extent. 
In addition, both companies are entering the buzzing obesity drug space with differentiated strategies. Cipla, through its partnership with Eli Lilly, will market obesity drug Moujaro in India, focusing on tier-2 and tier-3 cities. On the other hand, Dr Reddy’s plans to launch generic versions of blockbuster drugs Ozempic/ Wegovy in India, Canada and Brazil over the next three to six months. 
Overall, we see the high base effect to neutralize from Q1FY27 onwards and expect growth momentum to improve from the second half of FY27. We remain positive on both stocks, with target prices of ₹1,490 for Dr Reddy’s and ₹1,570 for Cipla.

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