 "Antique prefers domestic-focused pharma firms; resumes coverage on 4 stocks")
Domestic-focused pharmaceutical companies are better placed than their US-focused peers, given stronger earnings visibility and lower exposure to pricing pressure in the US market, according to analysts at Antique Stock Broking.
Antique expects the Indian pharmaceutical market to grow at 10-11 per cent, driven by a base growth of 8-9 per cent and an additional 1-2 per cent contribution from GLP-1 therapies. The domestic formulations segment under its coverage is projected to deliver a 12 per cent compound annual growth rate over the financial years 2025-28 (FY25-28).
On the US front, the brokerage noted that the base business continues to face price erosion, with growth for US-focused companies increasingly dependent on product-specific opportunities. With the genericisation of Revlimid scheduled for January 2026, Antique expects an adverse impact on growth and profitability. As a result, companies are focusing on launches such as generic Advair, Abraxane and Symbicort for Cipla, and Abatacept for Dr Reddy’s Laboratories, to offset the pressure.
Given the better earnings predictability and capital efficiency of Indian branded generics, Antique Stock Broking said it prefers companies with a strong domestic presence and limited exposure to the US market. CATCH STOCK MARKET LIVE UPDATES TODAY
The brokerage has resumed coverage on Torrent Pharmaceuticals with a 'buy' rating, Cipla and Dr Reddy’s Laboratories with 'hold' ratings, and Concord Biotech with a 'buy' rating. Torrent Pharmaceuticals remains its top pick, Antique said.
The brokerage added that the US generics segment continues to see price erosion and rising competition in the base business. While the upcoming patent cliff is expected to support long-term growth in generics, near-term challenges remain. Citing Research Delta, Antique noted that between calendar years (CY) 2026 and 2028, around 90 drugs with a combined market value of about $53 billion are set to lose exclusivity.
On policy developments, Antique Stock Broking said the Indian pharmaceutical industry is undergoing a transformation driven by the China Plus One strategy, the BioSecure Act and recent US tariff policies. Despite these challenges, the sector is likely to benefit from increased global trust and investment, supporting growth and innovation, particularly in the contract development and manufacturing organisation (CDMO) segment as global companies look to diversify away from China.
The brokerage also flagged newly introduced US tariffs, noting that recent changes in trade policy could impact pharmaceutical exports, including those from India. While a temporary exemption has been granted, it said future policy adjustments could lead to higher costs and potential disruptions. ==============
(Disclaimer: The views and investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)