Over the past decade, many pharma companies have quietly reshaped their growth strategy. They are aggressively expanding their portfolios of chronic medicines used to treat long-term conditions such as diabetes, hypertension, cardiovascular diseases, and cancer.
The shift is more than a change in product mix. It is changing the economics of the business. Unlike acute medicines, which are prescribed for short durations, chronic therapies generate recurring demand, stronger prescription stickiness, and greater earnings visibility.
The opportunity is already showing up in the numbers. According to PharmaTrac, the diabetes and cardiac segments grew 18.8% and 16.1%, respectively, in the first half of 2026, surpassing the 11.3% growth of the broader Indian pharma market.
While the country’s largest drugmakers already have a strong presence in these therapies, a new group of companies is quietly building scale in chronic care through focused portfolios, niche positioning, and targeted acquisitions.
Four Companies, Four Different Playbooks
The playbook for capitalising on the chronic care opportunity varies across companies. Some are relying on acquisitions to accelerate the transition, others are investing in specialty therapies and R&D, while a few are leveraging an already dominant chronic franchise to widen their lead.
This article looks at Mankind Pharma, Alkem Laboratories, Torrent Pharmaceuticals and Zydus Lifesciences, four companies that represent four distinct strategies to build a larger chronic care franchise. While they are chasing the same opportunity, the capital they are deploying, the risks they are taking and the potential rewards for shareholders are very different.
#1. Mankind Pharma: Accelerating the Shift Through Acquisitions
Mankind Pharma built its domestic business on high-volume acute therapies and over-the-counter brands. But as chronic diseases become a larger part of India’s healthcare landscape, the company is rapidly repositioning itself towards specialty and chronic therapies.
Rather than relying only on organic growth, Mankind has adopted an acquisition-led strategy. Its ₹13,700 crore acquisition of Bharat Serums and Vaccines (BSV) strengthened its presence in fertility, critical care, and women’s health. The acquisition of Roche’s Rivotril brand expanded its neurology portfolio as well.
The change is already reflected in the business mix. Chronic therapies are now about 40% of the domestic formulation business, compared to 32% in 2020. March 2026 quarter gross margins improved to 71.6%, aided by growth of 14.7% and 11.6% in cardiology and anti-diabetic therapies, respectively.
Mankind Pharma: Financial Performance
| Metrics | FY25 | FY26 |
| Sales (₹ crores) | 12,207 | 14,278 |
| Gross Margin (%) | 71.4 | 71.6 |
| EBITDA Margin (%) | 24.8 | 24.5 |
| Net Profit (₹ crores) | 2,007 | 1,938 |
This strategy also resulted in a revenue increase of 17% in FY26. However, net profit fell 3.4% due to higher depreciation and finance costs following the BSV acquisition, offsetting the operating improvement.
The acquisition materially changed Mankind’s balance sheet. The company borrowed ₹9,000 crore to fund the deal, but improving cash flows has helped to reduce net debt to around ₹3,900 crore, or 1.1x adjusted EBITDA, by FY26-end. Management plans to repay the debt by FY28 and has already repaid ₹1,250 crore in April 2026.
Mankind Pharma: Return Efficiency
| Period | FY22 | FY23 | FY24 | FY25 | FY26 |
| ROCE (%) | 32 | 22 | 26 | 16 | 14 |
Historically, Mankind generated high returns on capital. But the larger capital base has been a drag on returns, with ROCE declining from 37% in FY21 to 14% in FY26. While such compression in returns is common after large acquisitions, the key question is whether BSV can deliver enough earnings growth and synergies to restore return ratios.
For investors, the story is no longer just about increasing chronic exposure. It is about whether Mankind can successfully integrate BSV, reduce leverage, and rebuild returns. If it succeeds, the company could emerge as one of India’s leading specialty pharma franchises.
#2. Alkem Laboratories: Reinventing an Acute-Care Giant
Alkem Laboratories built its domestic franchise on anti-infectives. But with chronic therapies growing faster than acute medicines, the company is steadily reshaping its portfolio towards cardiology, diabetes, respiratory and other specialty therapies.
Unlike Mankind, Alkem’s strategy has been largely organic. The company has consistently expanded its chronic field force and launched products in high-growth therapy areas. It also made an early entry into India’s GLP-1 market with the launch of semaglutide, which has already captured an 11% unit market share, according to management.
The strategy is gradually reflecting in the business mix. Chronic therapies now contribute around 22% of Alkem’s branded generics business, increasing by roughly one percentage point every year over the last few years.
Alkem Laboratories: Financial Performance
| Metrics | FY25 | FY26 |
| Sales (₹ crores) | 12,964 | 14,712 |
| Gross Margin (%) | 63.3 | 65.4 |
| EBITDA Margin (%) | 19.4 | 20.4 |
| Net Profit (₹ crores) | 2,165 | 2,302 |
In FY26, the company reported 13.5% growth in revenue from operations to ₹14,712 crore from ₹12,964 crore. The chronic portfolio grew 16.1%, comfortably ahead of the Indian pharmaceutical market, while helping the company to expand EBITDA margins to 20%.
Alkem Laboratories: Return Efficiency
| Period | FY21 | FY22 | FY23 | FY24 | FY25 | FY26 |
| ROCE (%) | 22 | 18 | 14 | 20 | 20 | 21 |
Unlike an acquisition-heavy transformation, Alkem’s balance sheet has remained relatively healthy with robust operating cash flows. ROCE has improved to 21% in FY26 from 14% three years ago, suggesting that its investments are beginning to translate into higher capital efficiency.
Alkem, through a strategic acquisition of Occlutech, which manufactures minimally invasive cardiac implants, has established its presence in medtech. The next phase of the story, however, hinges on execution, management’s ability to further improve the chronic mix while sustaining margins and return ratios.
#3. Torrent Pharmaceuticals: Doubling Down on a Position of Strength
Unlike Mankind and Alkem, Torrent Pharmaceuticals already has a chronic care franchise that contributes around 75% of its India business. Now, the company’s strategy is centred around consolidating that leadership.
Torrent’s acquisition of JB Pharma for ₹25,700 crore reflects this strategy. JB Pharma has a strong presence in hypertension and gastroenterology, and will also expand Torrent’s reach across doctors and hospitals. Torrent also launched semaglutide in India, with first-year sales estimated at ₹200-250 crore, significantly higher than any previous launch.
Torrent Pharmaceuticals: Financial Performance
| Metrics | FY25 | FY26 |
| Sales (₹ crores) | 11,516 | 13,980 |
| Gross Margin (%) | 75.9 | 75.8 |
| EBITDA Margin (%) | 32.3 | 32.6 |
| Net Profit (₹ crores) | 1,911 | 2,138 |
Financially, Torrent has consistently delivered strong execution. Revenue grew 21% to ₹13,980 crore in FY26, and operating margin improved marginally to 32.6%, which is among the highest in the industry.
But the JB Pharma acquisition has also changed its balance sheet. The company took on debt to finance the deal, which resulted in borrowings increasing from ₹3,202 crore in FY25 to ₹15,026 crore in FY26. Net Debt to EBITDA at the end of FY26 stands at 2.3x compared to 0.6x in FY25. Therefore, ROCE has also compressed from 27% in FY25 to 15% in FY26.
For investors, the investment case is now about execution, not strategy. If Torrent can successfully integrate JB Pharma, achieve the planned synergies and maintain its industry-leading profitability, it could further strengthen its dominance in India’s fast-growing chronic care market.
#4. Zydus Lifesciences: Strong Earnings, But Cash Flows Need Watching
Unlike Mankind, Alkem and Torrent, Zydus Lifesciences is pursuing a broader strategy than simply expanding its chronic portfolio. Alongside strengthening its presence in cardiology, respiratory, dermatology, oncology and nephrology, the company is investing in biosimilars, MedTech and specialty medicines to move up the pharmaceutical value chain.
The chronic strategy is already gaining traction. Chronic therapies now account for 46.3% of Zydus’ India branded formulations business, up 620 basis points over the past three years. The company has also strengthened its position in high-growth therapies through launches such as semaglutide and biosimilars and expects specialty products to become a meaningful growth driver from FY28.
Zydus Lifesciences: Financial Performance
| Metrics | FY25 | FY26 |
| Sales (₹ crores) | 23,241 | 27,148 |
| Gross Margin (%) | 72.7 | 73.1 |
| EBITDA Margin (%) | 30.4 | 31.2 |
| Net Profit (₹ crores) | 4,525 | 5,040 |
In FY26, Zydus reported its strongest performance with revenue growing at 17% to ₹27,148 crore, while operating margins expanded to a record 31.2%. This was supported by a richer product mix.
However, the balance sheet tells a more nuanced story. A series of acquisitions, including Amplitude Surgical, pushed borrowings from ₹3,213 crore to ₹12,496 crore during FY26. Operating cash flow fell sharply to ₹2,117 crore from ₹6,777 crore a year earlier. Free cash flow turned negative as acquisition-led investments surged. These factors compressed ROCE to 21% in FY26 from 24% in FY25.
For investors, the key metric is not revenue growth alone, but cash conversion and improved returns on capital.
At a Glance: How the Four Pharma Companies Compare
| Company | Chronic Strategy | Key Trigger | Financial Strength | Key Risk |
| Mankind Pharma | Acquisition-led expansion into chronic and specialty therapies | BSV acquisition, Rivotril acquisition | Chronic mix increased to 40% of domestic formulations (32% in 2020); FY26 gross margin 71.6% | Higher debt from acquisitions; ROCE declined to 14% |
| Alkem Laboratories | Organic shift from acute therapies to chronic care | Semaglutide launch, Occlutech acquisition | Chronic portfolio growing 16.1%; operating margin improved to 20%; ROCE 21%; strong operating cash flows | Scaling chronic business while managing competitive intensity |
| Torrent Pharmaceuticals | Strengthening an already dominant chronic franchise | ₹25,700-crore JB Pharma acquisition | Chronic therapies contribute ~75% of India business; industry-leading 33% OPM | Integration risk and sharp increase in borrowings |
| Zydus Lifesciences | Expanding chronic portfolio while moving into specialty medicines, biosimilars and MedTech | Amplitude Surgical acquisition, specialty pipeline, semaglutide | Chronic mix at 46.3%; FY26 OPM 31.2%; ROCE 21% | Weaker cash-flow conversion, higher borrowings after acquisitions |
How The Market is Valuing Each Company
P/E Multiple Trend of Pharma Companies
| Company | P/E | 5-yr Median PE | Industry PE |
| Mankind Pharma | 51.9 | 50.2 | 34.5 |
| Alkem Laboratories | 27.8 | 29.1 | 34.5 |
| Torrent Pharma | 75.7 | 55.4 | 34.5 |
| Zydus Lifesciences | 21.2 | 21.4 | 34.5 |
Valuations suggest that the market is rewarding execution certainty, not merely chronic exposure. Torrent Pharma commands the highest premium, reflecting investor confidence in its dominant chronic franchise and the successful integration of JB Pharma.
Mankind Pharma is trading close to its historical median and at a premium to the industry average. While investors acknowledge its acquisition-led transformation, the higher debt and weaker return ratios following the BSV acquisition appear to be limiting further re-rating.
In contrast, Alkem Laboratories and Zydus Lifesciences trade below their historical median and the industry average. For Alkem, the market appears to be waiting for a larger contribution from chronic therapies. For Zydus, despite strong earnings growth, concerns over weaker cash-flow conversion seem to be weighing on valuations.
Who Will Win the Chronic Care Race?
India’s shift towards chronic diseases is creating a multi-decade growth opportunity for the pharmaceutical industry. As patients remain on therapy for years rather than weeks, chronic portfolios offer companies more predictable demand, stronger prescription stickiness and better earnings visibility.
However, chronic exposure alone is unlikely to determine the winners. The companies that create the most long-term shareholder value will be those that can execute their strategy effectively, whether through acquisitions, organic expansion or innovation, while improving return ratios, generating strong cash flows and allocating capital efficiently. As the chronic care segment expands, add these stocks to your watchlist and monitor how they execute on their long-term growth plans.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Deepan Datta has spent over a decade studying stocks and mutual funds. His passion is to uncover interesting stories in the financial markets and share them through his writings with investors at large. He is focused on delivering clear, easy to understand and research-backed insights. Deepan began his career as a Research Associate at S&P Global, where he developed a strong foundation in financial research and data analysis.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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