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Behind Oct. 26’s 12.3% IPM Growth: Volumes Cool from Sept. Peak, Price Still Leads

* Growth Moderates, Volumes Pause: Oct ’26 IPM growth eased to 12.2% (from 13.5% in Sep ’26). Volume growth slowed down to 1.6% (from 3.4%). On quarterly basis, momentum remained stable, with Qtr Oct ’26 growth at 12.3% versus 8.3% in Qtr Oct ’25, leaving the base supportive.

* Price Still Does the Heavy Lifting: Price growth increased to 6.2% in Qtr Oct ’26 (from 5.9% in Qtr Jul ’26), accounting for half of IPM growth. New-product growth eased to 3.6% (from 3.9% in same period). The volume recovery since Qtr Jan’ 26 remains intact, although the latest monthly moderation suggests it is not yet broad-based.

* Chronic and Specialty Lead, Acute Stays Soft: Oncology grew 18.7% in Oct ’26, followed by vitamins at 17.0% and blood-related therapies at 16.3%. Cardiac grew 13.5%, while anti-diabetic growth was 14.7% (Exhibit 1). A winter-season recovery is not yet visible; November data will be an important monitorable.

* GLP-1 Anchors the Anti-diabetic Mix: Mounjaro retained its #1 position on both, MAT and MTH, rankings (Exhibit 3), with MAT sales of INR 1,544 Cr, up 229.4%. It contributed ~4% of IPM MAT incremental sales, and accounted for ~6% of anti-diabetic MAT sales. Mixtard declined 8.3% on a MAT basis and slipped to #23 on the MTH ranking. We view this as a mix shift within diabetes rather than evidence of broad-based demand expansion.

* Leaders Grow in-line, Mid-caps Outpace: SUNP retained its #1 position with an 8.5% share (Exhibit 2), although its MTH growth of 12.1% was marginally below IPM growth of 12.2%. ZYDUSLIF (18.1%), GNP (18.5%), MANKIND (16.4%) and TRP (15.8%) outgrew the market. CIPLA (10.4%), LPC (10.3%) and ALKEM (10.0%) lagged behind.

* Q2FY27 Overall Performance and View: Q2FY27 was mixed across our coverage universe. Revenue growth remained healthy, but margin continued to face pressure. Most companies contended with the US LOEs or pricing erosion, alongside higher R&D investment to strengthen pipelines. Portfolio strategies also continued to shift towards chronic and specialty therapies. Domestic demand remained relatively steady. Rolling-quarter IPM growth held at 12.2–12.3% in Qtr Oct ’26. Volume contributed 2.5 points to 12.3% growth, compared with 0.2 points to 7.7% a year ago. Price continues to account for around half of growth further reinforcing our view of mix shift towards specialty. India is cushioning the top line, but margin recovery remains dependent on execution of launches.

* Our Read for Oct ’26: IPM value growth of 12.2% alongside volume growth of 1.6% implies that the September volume spike did not repeat, while acute therapies remained weak. We view October as a normalisation after September’s stronger print, rather than a break in the broader trend. The low base, growth near 12% and chronic-led mix remain supportive. Sustained volume growth above 2% would provide greater confidence in the recovery.

* Conviction Intact, but Watch Volume Follows-through: We remain positive on SUNP and GRAN. SUNP’s scale and #1 IPM position support our thesis, although monthly growth broadly in line with the market leaves limited room for volume underperformance. GRAN retains its #3 position by value in the US controlled-substances market and continues to scale up its complex generics and peptides businesses.

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