Sun Pharma Q2 Review: Brokerages Largely Bullish On Portfolio Growth, Healthy Margins

Shares of Sun Pharmaceutical Industries Ltd. are in focus on Thursday, with brokerages pointing to solid portfolio growth and steady performance across key markets.

On Wednesday, Sun Pharma reported a consolidated net profit of Rs 3,117.95 crore for the September quarter, a 2.6% increase from Rs 3,040.16 crore a year earlier. Revenue from operations rose 8.6% year-on-year to Rs 14,405.2 crore, according to India’s largest drugmaker by sales. A Bloomberg poll had estimated revenue at Rs 14,244 crore and profit after tax at Rs 2,881 crore for the quarter.

Ebitda for the period came in at Rs 4,527 crore, up 14.9%, with margins improving to 31.3% from 29.6% in the same quarter last year.

The company said most markets recorded steady revenue growth. Although generic sales in the US declined during the quarter, this was offset by an increase in its innovative medicines portfolio.

“US sales of innovative medicines have surpassed generics for the first time during the quarter,” said Kirti Ganorkar, managing director of Sun Pharma.

Macquarie noted that revenue, EBITDA and PAT exceeded its estimates by 2%, 3% and 5%, respectively. Revenue from India and emerging markets grew 11% annually, supported by both generics and Innovative Medicines. Macquarie reiterated 'outperform' with a target price of Rs 2,000.

Citi said Sun’s healthy margins should ease investor concerns, even with Opex up 11%, tied to launch expenses of around $100 million in FY26. It pointed out that margins saw only a 40 basis points dip to 28.3%, which was better than expected. Citi maintained its 'buy' rating.

Morgan Stanley highlighted that Sun maintained leadership in India with 11% growth, while US sales fell 4% to $496 million due to lenalidomide erosion and higher competition. The brokerage maintained its 'overweight' rating and raised its price target to Rs 2,026 from Rs 1,948.