Leading Indian pharma exporters like Cipla, Dr Reddy’s Laboratories and Zydus Lifesciences been aggressively diversifying their export presence beyond the US markets over the last few quarters. And the above strategy has included buying pharma companies in Europe as well as expanding their marketing distribution and new product launches in Latin America and Africa, which have high growth potential over the next few years.
No doubt, the Trump administration has not put any tariffs till date on low-cost Indian generic medicines sold in that market despite all the rhetoric over the past few months. However, Indian pharma companies are not taking anything to chance, and their export diversification strategy has started to show, as highlighted by the recently declared results for the September 2025 quarter.
Investors on Dalal Street have also appreciated the strategy of Indian pharma exporters and several leading players are trading close to their 52-week highs.
Diversification from US markets visible in Q2FY26
Dr Reddy’s Laboratories has highlighted that its revenues from the European region were Rs 1,376 crore in the second quarter of FY26, a jump of 138 % on a y-o-y basis. The Hyderabad-based company had announced in late June 2024, its agreement with UK-based Haleon for purchase of Northstar Switzerland, a Haleon group company, to acquire Haleon’s global portfolio of consumer healthcare brands in the nicotine replacement therapy (NRT) category outside the United States.
In addition, its revenues in emerging markets overseas were Rs 1,655 crore in September 2025 quarter, a rise of 14% on a y-o-y basis. The company had launched Skorolox in Russia in the quarter under review, and it is for treatment of acute upper respiratory tract infections. In contrast, revenues in North America fell 13 % y-o-y to Rs 3,241 crore in Q2FY26 and that was attributed to pricing pressures in the generics market.
The company’s diversification strategy helped Dr Reddy’s Laboratories’ consolidated revenues rise 9.8 % y-o-y to Rs 8,805 crore in the September 2025 quarter and its net profit also rose 6.3% y-o-y to Rs 1,426.8 crore
Cipla too benefited from its diversification strategy — the company has highlighted its sales in emerging markets and Europe was $ 110 million ( nearly Rs 967 crore) vis-a-vis $ 96 million ( nearly Rs 810 crore) and that was attributed to improved demand for its respiratory medications. And its sales in the African market were $ 134 million in Q2 FY26, a rise of 5 % y-o-y and that was attributed to improved demand for respiratory and anti-infectives categories.
In contrast, revenues in north America were $ 233 million in the September 2025 quarter vis-a-vis $ 237 million a year earlier.
The expansion in global strategy helped the Mumbai-based company’s consolidated total revenue from operations rise 7.6 % y-o-y to Rs 7,589.4 crore in Q2FY26 while its net profit rose 3.6 % y-o-y to Rs 1,353 crore.
And for Zydus Lifesciences, its international markets formulation business, which includes emerging markets and Europe, revenues were Rs 751.3 crore in Q2FY26, a rise of nearly 39.6 % on a y-o-y basis. The Ahmedabad- based company in late March 2025 had acquired France’s Amplitude Surgical for €256.8 million (approximately Rs 2,380 crore).
In its key US formulations business, sales were Rs 2,743.7 crore in the September 2025 quarter, a rise of 13.5% on a y-o-y basis, and it had 7 product launches in the quarter under review including in the cardiac-related segment.
As a result, the company’s consolidated revenue from operations grew 16.9 % y-o-y to Rs 6,123 crore in the September 2025 quarter and its net profit rose 38.2 % y-o-y to Rs 1258.6 crore.
Growth plans of pharma companies
Cipla plans to launch four respiratory-related medications in the US market during calendar year 2026 and three for peptides (treatment of diabetes) in the north American market.
Meanwhile, Dr Reddy’s Laboratories had entered into an agreement with J & J to acquire the rights of anti-vertigo medication, Sturgeon for 18 markets in APAC and Europe, Middle East and Africa including India for $ 50.5 million ( nearly Rs 430 crore). Investors will also be watching the growth momentum of the company’s NRT category in the European market, over the next few quarters.
And Zydus Lifesciences had launched Beizray in October 2025, and this medication is for treatment of breast cancer, prostate cancer, gastric adenocarcinoma, and head and neck cancer. In addition, investors will be watching for synergies from its earlier acquisition of France’s Amplitude Surgical.
Investors on Dalal Street
Investors have been bullish on the growth prospects of pharma shares – Zydus Lifesciences was 0.3% higher at Rs 947 in Monday trade, and not too far from its 52-week high of Rs 1,059 that was reached on 19 September 2025.
Meanwhile, Cipla also gained 0.5 % to Rs 1512.5, and not too far from its 52-week high of Rs 1,672 that was reached on 23 October, 2025.
And Dr Reddy’s Laboratories declined 0.6% to Rs 1,198.5, and it had reached its 52-week high of Rs 1,404.6 on 8 January, 2025.
Valuations and outlook
Dr Reddy’s Laboratories trades at a P/E of 17.3 times, according to Screener.in, while Cipla trades at 22.4 times.
Meanwhile, Zydus Lifesciences trades at a P/E of 18.9 times.
How the stock prices of these companies perform from here only time will tell. But one thing is for sure. These select Indian pharma companies are showing how to navigate a geopolitically challenged world.
Perhaps, there’s a lesson in there for all US focused exporters.
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.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
