Market Performance: Pharma Stocks Bounce Back Strongly
Pharma stocks have staged a remarkable recovery since April 2025, with major players like Granules India, Gland Pharma, Dr. Reddy's Laboratories, Natco Pharma, Aurobindo Pharma, and Cipla leading the charge.
- Granules India surged 28% from ₹422 to ₹533.
- Gland Pharma jumped 27.8%, now trading at ₹1,633.
- Dr. Reddy's Labs gained 26%, while others, such as Natco Pharma, Cipla, and Aurobindo Pharma, rose between 11.5% and 23%.
The Nifty Pharma index rebounded 13%, signaling renewed investor confidence.
What Drove the Pharma Rally?
The sector's rebound was fueled by:
- US Policy Relief: The exclusion of generic drugs from the MFN Pricing Policy eased pricing pressures for Indian exporters.
- Strong Exports: 54% of India's pharmaceutical production is exported, with 30% of it going to the US.
- Attractive Valuations: Investors capitalized on lower stock prices, driving demand.
Key Financial Highlights
- US Market Contribution: 85% of exports are generic formulations.
- Generic Drug Dominance: Accounts for 90% of US prescriptions but only 13% of spending.
- Stable Margins: Gross margins improved to 66.1% in Q4 FY25.
Company Snapshots
Granules India
- April Low: ₹422
- Current Price: ₹533 (+28%)
Gland Pharma
- April Low: ₹1,278
- Current Price: ₹1,633 (+27.8%)
Dr. Reddy's Laboratories
- April Low: ₹5,890
- Current Price: ₹7,420 (+26%)
Sector Outlook: Growth Momentum Continues
The pharma sector reported strong Q4 FY25 results:
- Revenue Growth: 11.5% YoY, 1.6% QoQ
- US Business: $2,240 million, up 7.7% YoY
- Indian Market (IPM): 8% YoY growth
With a robust pipeline in biosimilars and generics, the sector is poised for sustained growth.
Summary
Pharma stocks, such as Granules India, Gland Pharma, and Cipla, have rebounded sharply, driven by US policy support, strong exports, and improved margins. Investors are betting on continued growth, making the pharmaceutical sector a top-performing one in 2025.
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