Although Trump's pharma sector tariffs are threatening to hit the sector, and different estimates of the possible impact, analysts across brokerages are keeping their expectations steady for earnings following estimations of muted Q4 FY2025 performance. Estimates reveal a subtle revenue growth, margin improvement and strong US generics performance to support earnings beyond a muted Q4 FY2025 performance.

Common picks that appear attractive to analysts include Lupin, Cipla, and Sun Pharmaceuticals

Most brokerages flag US business recovery as the key swing factor this quarter, aided by easing price erosion, new launches, and favourable currency movement. US generics are likely to be the key growth engine, aided by products like gRevlimid, gSpiriva and other respiratory launches, while domestic formulations may grow at a slower but stable pace. Margin recovery is another common thread, supported by softer raw material and freight costs.

Yet, there’s caution in the commentary, particularly around sustainability and the potential knock from the proposed US tariff action on Indian APIs and formulations.

While the sector has dodged the immediate threat of US tariffs, worries around pricing pressure in key generic categories, gRevlimid normalisation (stabilisation in initial high sales and revenue after launch period), and a potential hit to specialty revenues in the US still loom large. Brokerages like Kotak Institutional Equities, HSIE, Nomura, Axis Securities, and Choice Broking have zeroed on some high-conviction picks and also at-risk names that could disappoint.

Sun Pharmaceuticals [Analyst recommendations: 34 Buys, 5 Holds, 3 Sells]

Overall estimated growth YoY basis: Revenue 9.4 to 10 percent | EBITDA 15 to 24.7 percent | PAT 5 to 8.2 percent

While Sun Pharma is expected to deliver solid revenue and profit growth in Q4 FY25, factors such as increased R&D spending and a high base in specialty sales may moderate margin expansion. The company's performance in the US market, particularly with gRevlimid, and its domestic growth will be key areas to watch in the upcoming earnings release.

HSIE highlights the company's specialty scale-up and stable input costs, which are expected to drive gross margin expansion. However, an increase in R&D expenses may offset some of the margin gains. Nomura expects a boost from gRevlimid sales and strong domestic growth, although the specialty segment's growth may slow down due to a high base in the previous quarter. Choice Broking projects Sun Pharma to report 9.4 percent YoY revenue growth, driven by strong sales of Ilumya and Cequa, with EBITDA expected to grow 24.7 percent YoY. Axis Securities anticipates stable gross margins and EBITDA margins due to declining raw material prices.?

Lupin's [Analyst recommendations: 22 Buys, 10 Holds, 5 Sells]

Overall estimated growth YoY basis: Revenue 11.6 to 14 percent YoY | EBITDA 32 to 37.4 percent | PAT 23 to 33.4 percent

While Lupin is expected to deliver solid revenue growth in Q4 FY25, factors such as increased R&D spending may impact EBITDA margins. The company's performance in the US market, particularly with new product launches, and its domestic growth will be key areas to watch in the upcoming earnings release.

Analysts anticipate a strong performance for Lupin in Q4 FY25, driven by steady traction from key products like gSpiriva and gMyrbetriq, along with new generic launches. HSIE expects growth in the chronic segment in India to contribute significantly. Nomura anticipates an increase in US sales due to the launch of new products like Tolvaptan and gXarelto, although higher R&D expenses are likely to drive EBITDA margins lower. Choice projects Lupin to report 11.6 percent YoY revenue growth, driven by new product launches in the US and a recovery in the domestic business, with EBITDA margins expected to improve due to lower raw material prices. Axis anticipates 12.2 percent YoY revenue growth, supported by contributions from gSpiriva, gSupreb, and gPrezista.?

Cipla [Analyst recommendations: 24 Buys, 8 Holds, 5 Sells]

Overall estimated growth YoY basis: Revenue 11 to 18.6 percent | EBITDA 22 to 55.7 percent | PAT 12 to 42.6 percent

It's Q4 earnings estimates are underpinned by higher sales in the US and sustained momentum in South Africa — two geographies that continue to anchor its international business.

Kotak Institutional Equities points out that Cipla’s business model has become increasingly de-risked, thanks to a diversified product mix and consistent investments in US manufacturing infrastructure. Still, operating leverage may not fully translate into margin gains this quarter. Nomura, while positive on the upcoming pipeline of US launches, flags a likely dip in EBITDA margins (more a reflection of a high base in FY25 rather than operational slack). That said, the overall tone on US performance remains constructive. Axis Securities expects stable US revenues with key contributions from inhalation (method of delivering drugs directly to the lungs through devices), and complex generics like Albuterol, Lanreotide, gRevlimid, and Brovana.

Divi's Laboratories [Analyst recommendations: 11 Buys, 6 Holds, 12 Sells]

Overall estimated growth YoY basis: Revenue 12 to 15 percent | EBITDA 14 to 18 percent | PAT 18 to 20 percent

Divi’s Labs continues to be a market favourite for its clean balance sheet, high-quality compliance record, and leadership in the custom synthesis (CDMO) space. However, the near-term earnings visibility is increasingly underwhelming. While Choice Broking expects 15.6 percent YoY revenue growth led by the custom synthesis vertical, most brokerages — including Kotak — argue that the upside is already priced in. The company is expected to post EBITDA and PAT growth broadly in line with revenue, implying no meaningful operating leverage.

Divi’s also continues to face competition from aggressive Chinese players in the API space and is navigating a difficult global procurement environment, especially for legacy generics. While its capex-led expansion at the Kakinada site may aid medium-term growth, the current earnings momentum lacks any big-bang catalysts. Most importantly, the stock offers no near-term trigger, and in a results season where margin expansion is a key differentiator, Divi’s may struggle to keep up.

Dr Reddy’s Laborataries [Analyst recommendations: 15 Buys, 11 Holds, 14 Sells]

Overall estimated growth YoY basis: Revenue 12.6 to 18.4 percent | EBITDA 22.5 to 26.2 percent | PAT 11.6 to 18.3 percent

The most notable contributor this quarter is likely to be the incremental revenue from Sanofi’s acquired vaccine business, which begins to reflect meaningfully in the numbers. This acquisition, along with the integration of the nicotine replacement therapy (NRT) portfolio in Europe, is seen as a strategic play to broaden its consumer and wellness footprint beyond traditional generics.

However, the generics core faces its own pressures. Nomura has penciled in lower estimates, citing a decline in gRevlimid revenues and intensifying competition in key US products — a dynamic that’s already weighed on growth in previous quarters. Choice Broking expects revenue growth driven by new launches and the expanding European portfolio. The firm also sees EBITDA margins improving, helped by a favourable product mix, which may soften the impact from falling high-value generics like gRevlimid. Axis Securities reflects narrowing contribution of gRevlimid generic as market saturation and pricing pressures set in.

Aurobindo Pharma [Analyst recommendations: 22 Buys, 3 Holds, 4 Sells]

Overall estimated growth YoY basis: Revenue 8 to 10 percent | EBITDA 9 to 12 percent | PAT 1 to 2.7 percent

Aurobindo Pharma enters Q4FY25 with a more balanced outlook, as its long-troubled injectable business begins to show signs of recovery and momentum in the US and European markets stays intact.

Nomura expects a stable performance in the US, buoyed by new product launches and continued contribution from key generics. While the quarter may not feature any standout windfalls, the portfolio appears to be steadily expanding, reflecting the company’s efforts to reinvigorate growth beyond one-offs. Aurobindo’s injectable recovery, which had previously been hampered by regulatory challenges and plant-level disruptions, is also expected to support the topline — though its full impact may play out more visibly in coming quarters. Choice Broking forecasts revenue growth led by the new launches in the US, while gross margins are expected to remain stable — suggesting that pricing pressure in the US generics space may be easing, or at least being offset by volume traction. Axis Securities, meanwhile, anticipates gross and EBITDA margins to hold steady, in part to declining raw material costs — a tailwind for the entire sector this quarter.

Biocon [Analyst recommendations: [Analyst recommendations: 10 Buys, 3 Holds, 5 Sells]

Overall estimated growth YoY basis: Revenue 7 to 10 percent | EBITDA 15 to 20 percent | PAT 10 to 15 percent

The Q4FY25 expectations are lukewarm, with revenue growth trailing its peers. Choice Broking mentions that while its insulin and monoclonal antibody portfolio continues to expand globally, cost pressures, increased competition, and regulatory bottlenecks have capped earnings progression.

Kotak’s analysis flags Biocon’s high US EBITDA exposure, which makes it particularly vulnerable to any escalation in US tariffs or reimbursement changes. Moreover, Nomura and Axis highlight that Biocon has not been able to extract pricing gains in biosimilars the way other global players have. In an environment where innovation is expected to drive returns, Biocon is stuck in the middle — bearing the costs of R&D but without the scale-driven margin payoffs yet.

Zydus Lifesciences [Analyst recommendations: 17 Buys, 10 Holds, 6 Sells]

Overall estimated growth YoY basis: Revenue 12 to 14 percent | EBITDA 10 to 17 percent | PAT 8 to 14 percent

Zydus is among the few companies expected to report strong YoY revenue growth in Q4FY25 — driven by continuing gRevlimid sales and strength in the India business. But what’s worrying analysts is margin compression despite rising revenues.

Nomura flags mounting competition in Zydus’s key US molecules such as gAsacol HD and gMyrbetriq, along with rising R&D intensity, as reasons why the bottom line isn’t keeping pace with the top line. Moreover, Zydus’s exposure to US biosimilars — an area prone to price wars — adds to the uncertainty. Analysts feel that while Zydus has done well to expand its pipeline, it lacks the specialty tailwinds seen in peers like Sun or Lupin. While Motilal Oswal upgraded its rating to 'Buy' with a target price of Rs 1,850, ICICI Securities maintained a 'Reduce' rating, setting a target of Rs 1,345, citing concerns over overhead costs and muted US performance.

Glenmark Pharma [Analyst recommendations: 8 buys, 3 Holds, 1 Sell]

Overall estimated growth YoY basis: Revenue 8 to 10 percent | EBITDA 15 to 20 percent | PAT 10 to 15 percent

Glenmark Pharma is in the midst of a business overhaul, with divestments and portfolio restructuring aimed at becoming leaner and more innovation-focused. However, these transitions take time to reflect in earnings.

Nomura notes that Glenmark’s recent product launches have not delivered at scale, and there’s lingering uncertainty around integration of its out-licensed portfolios and biosimilar collaborations. The company’s focus on debt reduction and cost control is commendable, but analysts argue that earnings visibility remains cloudy, and FY25 is likely to be a reset year. While the long-term outlook may be constructive, Q4 could see operational underperformance, especially in contrast to peers riding on US momentum.

Margin recovery across the board

Brokerages are cautiously optimistic. With US pricing pressure easing and API costs stabilising, margin expansion of 90 bps YoY is likely. Domestic growth, however, may remain muted, especially in chronic therapies. Lupin, Cipla, and Sun Pharma are expected to be the bigger beneficiaries, especially those with scale-up in US sales.

Hospitals and diagnostics hold steady

Apollo, Max, and Fortis are expected to post decent numbers, helped by improved occupancy and tapering costs. Apollo’s margin profile may see early benefits from stabilising its 24/7 investments. Diagnostic names like Dr Lal Pathlabs and Metropolis are expected to deliver steady growth as B2C momentum improves.

Tariff worries creep into the outlook

Beyond Q4, the sector is keeping an eye on the potential for US import tariffs. While not an immediate risk, InCred Equities flagged that tariffs in the 15–25 percent range could dent EBITDA by 20–30 percent for some generic-heavy firms. “Players with diversified earnings—domestic-led portfolios or CRAMS exposure—will likely be better positioned. But the overhang is real,” InCred noted in its preview.