Pharma Sector Q2FY26 Preview: Challenges and Opportunities Ahead
The Indian pharma sector is expected to face a transition quarter in Q2FY26, with soft growth projected due to declining gRevlimid sales, GST-related de-stocking, and a weak acute season in India. Brokerages expect revenue growth to be in the range of 7-10% YoY, while earnings may rise only 4-5%, reflecting margin pressure.
Fading gRevlimid Opportunity
Lower US sales of gRevlimid are a major drag for Dr. Reddy’s, Zydus, Aurobindo, and Cipla. The decline in gRevlimid sales is expected to impact the revenue growth of these companies. To know more about the pharma sector trends, click here.
GST Impact in India
Channel de-stocking in September 2025 post-GST revision hit billing for 15-20 days. The GST impact is expected to be a major challenge for the pharma sector in Q2FY26. For more information on GST impact on pharma sector, visit our website.
Weak Acute Season
Slower demand for acute therapies further curbed growth. The weak acute season in India is expected to impact the revenue growth of pharma companies. To learn more about the acute therapies market trends, click here.
Margin Pressure
JM Financial expects low 20% EBITDA margins; ICICI Securities projects 25% margin for coverage companies. The margin pressure is expected to impact the earnings growth of pharma companies. For more information on pharma sector margin pressure, visit our website.
Sector Revenue Growth Expected at 7% YoY
Sector revenue growth is expected at 7% YoY, while earnings may rise only 4%. The soft growth in Q2FY26 is expected to be a transition quarter for the pharma sector. To know more about the pharma sector revenue growth, click here.
Lupin to Lead Peers
Lupin is expected to lead its peers with 20% revenue and 35% EBITDA growth, driven by Tolvaptan launch and no Revlimid exposure. The strong performance of Lupin is expected to be a positive factor for the pharma sector. For more information on Lupin stock analysis, visit our website.
Zydus Lifesciences May Grow 12% YoY
Zydus Lifesciences may grow 12% YoY, aided by strong US and export sales. The growth of Zydus Lifesciences is expected to be a positive factor for the pharma sector. To learn more about the Zydus Lifesciences stock analysis, click here.
Key Positives and Concerns
Brokerages agree that Q2FY26 will be a soft quarter, marking a transition phase for the sector. Key positives include Lupin’s US launches, Divi’s strong CDMO traction, and resilient India growth for Sun and Torrent. Key concerns include gRevlimid erosion, GST-led destocking, pricing pressure, and US tariff risks. For more information on pharma sector key trends, visit our website.
Conclusion
In conclusion, the pharma sector is expected to face a transition quarter in Q2FY26, with soft growth projected due to declining gRevlimid sales, GST-related de-stocking, and a weak acute season in India. However, there are positive factors such as Lupin’s US launches and Divi’s strong CDMO traction that are expected to support the sector. To know more about the pharma sector outlook, click here.
