We believe over a longer term the Indian API industry would stand to benefit as regulators encourage investments and incentivise the API industry to reduce dependence on China. Also, the cost arbitrage has narrowed between Indian and Chinese manufacturers given stricter environmental and compliance regulations in addition to increased labour cost in China. Q3 results reaffirms stable base business outlook for the US (for last 6 quarters) and strong trends for domestic formulations business (double digit growth at 11% for covered companies vs 9.5% for IPM). R&D; spends remain calibrated at 7.8% of sales (vs 9%+ in FY17/18) and EBIDTA margins improved 30bps QoQ. We forecast revenue/EPS CAGR of 9%/15% over FY20-22e for our covered universe. Torrent and Cipla are preferred Buys.