India’s branded pharmaceutical market (IPM) is showing signs of strain as low-cost alternatives like Jan Aushadhi expand rapidly, reshaping competitive dynamics. While the IPM reported 7.4 per cent on-year growth in April 2025, driven by pricing gains and new product launches, volume traction in the end-market remained sluggish. Kotak Institutional Equities (KIE) highlighted that 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.
However, going forward, Kotak said, FY26 is expected to report 10-23 per cent YoY growth in domestic sales for its coverage. This will be driven on a slightly stronger acute season along with pricing, acquisitions and in-licensing deals. “Sun, Cipla, Lupin, Emcure and JB are our preferred picks,” it said.
Mixed performance in April 2025: Who is leading? Who is lagging?
Chronic therapies grew 9 per cent year-on-year while acute therapies rose 6 per cent in April 2025 and the bulk of the IPM growth in the month was driven by therapies such as cardiac, urology, oncology, neuro, ophthals, pain and VMN. Per the findings of the report, revenues of both domestic and MNC companies grew by 7.4 per cent YoY in April 2025. In terms of growth leaders, Kotak said, Glenmark, JB, Dr Reddy’s, Sun, Torrent, Abbott, Intas, Cipla, Ajanta, Macleods, Lupin, and Alkem led the pack with 8-13 per cent YoY growth. In contrast, companies like Pfizer, Sanofi, Alembic, GSK, Micro Labs, USV, and Himalaya underperformed, recording only -4 per cent to 3 per cent growth.
Market share shifts
IPM growth of 7.9 per cent on-year in Moving Annual Turnover (MAT) April 2025 was mainly led by a 430 bps YoY contribution from higher pricing and 230 bps YoY contribution from new launches, stated the Kotak report. Volume growth, meanwhile, contributed 130 bps to IPM growth in MAT April 2025, much higher than the nil contribution to IPM growth in MAT Apr 2024.
Over the past six months, top gainers in market share among the top 25 companies included Sun, FDC, Torrent, Dr Reddy’s, Ipca, Abbott, JB, and Ajanta. Meanwhile, Alkem, Micro Labs, Aristo, Macleods, GSK, and Indoco lost the most share.
Generics gaining ground
One of the key reasons for muted branded IPM volume growth in India is rising competition from alternate channels like Jan Aushadhi, trade generics, and private generic pharmacy chains. These alternatives are expected to reduce branded market growth by 120-160 basis points annually through FY2028, Kotak Institutional Equities said. “With Jan Aushadhi’s rapid expansion plan (~15k stores now), there is a risk of this hit on IPM swelling further,” the brokerage firm said. Despite this, current market valuations do not reflect a sharper slowdown, leaving room for further downside if branded generics continue to lose share. However, reversing the trend may be difficult without addressing concerns around product quality in the generics segment, it concluded.