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IPM reported growth of 9.3% yoy in March 2025, driven by improved growth across both acute and chronic. IPM growth in MAT Mar 2025 stood at 8.0% yoy versus 7.5% yoy growth in MAT Mar 2024, exhibiting slight improvement despite lower NLEM price hikes. We highlight that volume traction in the endmarket is still a bit sluggish, with pricing contributing the bulk of the growth. IPM sales in 4QFY25 grew by 7.3% yoy and 9.7% qoq. While organic domestic growth for most companies would remain in mid-to-high single digits, we expect overall 4QFY25 domestic sales for relevant coverage companies to grow 7-18% yoy, owing to acquisitions as well as in-licensing deals. Within our formulations coverage, Sun, Cipla, Lupin, JB and Emcure are preferred picks.

JB, Cipla and Ipca growth leaders; Alembic and Sanofi lag in March 2025

IPM grew by 9.3% yoy in March 2025 on a subdued base of 1.4% yoy growth in March 2024. Chronic therapies grew by 11% yoy and acute therapies by 8% yoy in the month. Bulk of the IPM growth in March 2025 was driven by therapies such as urology, cardiac, gastro-intestinal, onco, neuro, VMN and derma. In March 2025, revenues of domestic companies grew by 9.0% yoy, slightly lower than 10.4% yoy sales growth for MNC companies. Including unlisted companies, growth leaders in March 2025 were JB, Cipla, FDC, Ipca, Glenmark, Pfizer, Himalaya, Sun, Intas, Abbott, Zydus, Corona and Torrent, which posted 10-17% yoy sales growth. On the other hand, key underperformers during the month were Alembic, Sanofi, Dr Reddy’s, Eris, Indoco and Macleods, which posted sales growth of 1-5% yoy.

Market share trends: Sun and Cipla top gainers; Alkem and Macleods top losers

IPM growth of 8.0% yoy in MAT Mar 2025 (on a base of 7.5% yoy) was led by 430 bps yoy contribution from higher pricing and 230 bps yoy contribution from new launches. Volume growth contributed 140 bps to IPM growth in MAT Mar 2025, much higher than 20 bps contribution to IPM growth in MAT Mar 2024. Among the top 25 companies, Sun, Cipla, Glenmark, Abbott, Torrent, Lupin, GSK and Intas have gained maximum share over the past six months. On the other hand, Alkem, Macleods, Aristo, Ipca, Dr Reddy’s, Mankind and Indoco have lost maximum share in the past six months.

Risk of further acceleration in generics adoption not being adequately baked in

We reiterate one of the key reasons for muted branded IPM volume growth is continued traction in the alternate channels, including Jan Aushadhi, trade generics and private generic pharmacy chains. As highlighted in our recent report (link), factoring in the volume impact from these channels, we estimate a 120-160 bps annual dent on branded IPM growth at least until FY2028E. With Jan Aushadhi’s rapid expansion plan (~15k stores now), there is a risk of this hit on IPM swelling further. We highlight that current domestic valuations imply the ongoing steady decline in the share of branded generics will continue and do not factor in any further growth deceleration in the next few years. If the share of branded slips further, there is scope for further derating. Yet, a forced change might be ineffective unless the quality conundrum is addressed.

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