Bernstein Bets Big on Indian Pharma: Zydus Is Top Pick as Analysts See Sector At $195 Bn by 2035 — But Are Biocon and Mankind in Trouble?
Sarthak Kumar
Global research firm Bernstein (Société Générale Group) has initiated coverage on India’s healthcare sector with a bullish outlook — calling the next decade an “Innovation Power Decade” and identifying Zydus Lifesciences as its top pick. The report, dated May 21, 2026, initiates Zydus, Lupin, and Sun Pharma with Outperform ratings while slapping Underperform tags on Biocon and Mankind Pharma — two of the sector’s most-watched names.
The headline number: Bernstein expects the Indian biopharma industry to grow 4X to $195 billion over the next decade, with incremental innovation alone adding $70–75 billion to industry size.
The Bull Case
The thesis rests on three pillars. First, a global “live longer, look fitter” wave driven by AI leverage and rising disposable incomes is expected to add ~100 million new patients annually, creating a $400 billion opportunity in new modalities. Second, six innovation niches — including 505(B)(2) NDAs, orphan drugs, drug-device combos, and RNA/CAT-T cellular therapies — are pegged as the key rainmaker engines. Third, Bernstein’s proprietary model projects Gen AI adoption alone will add 3–4 percentage points to profit margins industry-wide over the decade.
The timing matters. Following the expiry of the semaglutide patent in March 2026, several Indian companies launched generic versions at nearly 90% lower prices , with analysts estimating the GLP-1 market could expand sixfold. Nomura expects Zydus to benefit from differentiated products and tie-ups in this space. 
India’s pharma market also grew 12.4% year-on-year in February 2026, marking a third consecutive month of double-digit expansion. 
The Valuation Catch
Bernstein acknowledges Pharma Nifty multiples have stretched slightly above their ten-year average of 30.5X — though it argues Outperform picks are trading well below historical averages. The market, per Bernstein, is pricing in US generics headwinds but not the emerging markets upside or the rainmaker pipeline.
Biocon and Mankind Pharma are named as non-consensus Underperforms by the brokerage. Aurobindo gets a neutral Market-Perform.
For traders and investors who are keenly watching out for sector rotation plays, this initiation — from a credible Tier-1 global desk — could be a fresh institutional catalyst for Zydus and Lupin in the near term.