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Informist, Monday, Jul. 27, 2026

By Narayana Krishna

HYDERABAD - Sun Pharmaceutical Industries Ltd. is expected to report healthy growth in consolidated revenue for the June quarter, both from a year ago and the trailing quarter. However, the net profit is likely to decline from the year-ago period, while showing moderate growth compared to the March quarter, analysts said. Weakness in the US generics business due to pricing pressure and a continued decline in sales of high-margin cancer drug Revlimid are expected to weigh on profitability.

Sun Pharma is expected to report a consolidated net profit of nearly INR 30 billion for the June quarter, down nearly 4% from the year-ago period, according to the average of estimates from 14 brokerages. The company's revenue is estimated at over INR 155 billion, up 12% on year. On a trailing basis, the net profit is likely to rise 10%, while revenue is likely to rise 6%, the estimates show.

The highest estimate for the company's net profit is nearly INR 32.3 billion from JM Financial Institutional Securities Ltd., while the lowest estimate of over INR 27.5 billion is from Kotak Securities Ltd. The highest revenue estimate is by PhillipCapital (India) Pvt. Ltd. at INR 159 billion, and the lowest is by Prabhudas Lilladher Pvt. Ltd. at over INR 151 billion.

Sun Pharma will announce its June quarter earnings on Friday.

STEADY GROWTH

Sun Pharma's June quarter sales growth is expected to be driven by India formulations, emerging markets, and the global speciality products portfolio. The India business is likely to grow 11–13% on year, supported by strong demand in chronic therapies and new product launches, according to analysts.

Emerging markets and the rest of the world are expected to report growth in the range of 7–15%, aided by demand for branded generics and innovative products, according to analysts.

The global speciality portfolio is expected to remain a key growth driver for Sun Pharma, with June quarter sales likely to rise about 17–18% on year. Growth is expected to be led by products such as Ilumya, used for treating plaque psoriasis, Winlevi, used for acne treatment, Leqselvi, indicated for autoimmune-related conditions, and Unloxcyt, an oncology drug. Analysts expect continued scale-up of these products, although contribution from some recently launched assets may remain modest in the near term.

In contrast, the US generics business is expected to remain subdued, with sales largely flat on year due to pricing pressure and lack of meaningful new launches. The absence of contribution from generic Revlimid, used in cancer treatment, which had boosted earnings in the past, is expected to weigh on the overall US performance, according to analysts.

MARGIN PRESSURE

Sun Pharma's operating performance is expected to remain under pressure in the June quarter due to the absence of high-margin products and pricing pressure coupled with high costs, according to analysts. Earnings before interest, tax, depreciation, and amortisation are expected to remain broadly stable to slightly higher on year, with most estimates indicating limited growth.

The company is expected to report consolidated EBITDA of INR 43.5 billion, up 1% on year and 10% on quarter, according to estimates from 14 brokerages. The EBITDA estimates were in the range of INR 48 billion to INR 40 billion.

The company's June quarter EBITDA margin is expected to range between 26% and 30%, compared with around 29% in the year-ago period, reflecting higher input and freight costs, increased spending on speciality products, and an unfavourable product mix.

HDFC Securities Ltd. expects the margin at 28.2%, down 121 basis points on year, while Kotak Securities Ltd. estimates the margin at 28.2%, down 120 bps on year. Nuvama Wealth Management Ltd. expects the margin at 27%, while Nirmal Bang Equities Pvt. Ltd. has a higher estimate of 30.5%. Motilal Oswal Financial Services Ltd. expects the margin at 26.2%, compared with 29.1% a year ago.

The gross margin is also expected to decline due to price erosion in the base business, higher raw material costs, and the absence of high-margin Revlimid sales. Increased investment in research and development and speciality product commercialisation is also likely to weigh on profitability.

Analysts are keenly watching the progress on the acquisition of US biopharmaceutical company Organon. Sun Pharma announced the acquisition of Organon for about $11.75 billion in an all-cash deal in April, marking the largest overseas biopharmaceutical acquisition by an Indian company. The completion of the transaction is critical for Sun Pharma. Analysts are also looking for updates on research and development spending, and the management's comment on the full-year growth outlook.

Other key factors to watch include recovery in the US generics business, pricing trends, ramp-up in speciality products, and sustainability of growth in India and emerging markets.

Of the 17 research reports on the company available with Informist, 15 have a 'buy' or equivalent rating on the stock with an average target price of INR 2,088. This is nearly 7% higher than the current market price. One brokerage has a 'hold' rating on the stock with a target price of INR 1,985 and one has a 'sell' rating with a price target of INR 1,848. 

The stock has risen nearly 5% since the announcement of its March quarter earnings. On Friday, the company's shares ended at INR 1,941.10 on the National Stock Exchange, up 0.7%.

Following are the June quarter earnings estimates for Sun Pharmaceutical Industries Ltd. based on reports from 14 brokerage firms in the descending order by the estimate of net profit in INR billion:

End.

US$1 = INR 96.56
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Himanshi Gupta

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