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Informist, Tuesday, Sept. 8, 2026

 

--Moody's assign Baa1 long term issuer rating to Sun Pharma, outlook stable 

 

MUMBAI – Moody's Ratings has assigned a "Baa1" long-term issuer rating to Sun Pharmaceutical Industries Ltd. with a "stable" outlook, the rating agency said in a release Tuesday. The rating also incorporates Sun Pharma's proposed acquisition of US-based Organon & Co. Moody's stable outlook reflects expectations of the company delivering a smooth integration of Organon, sustained mid-to-high single digit revenue growth, and steadily improving profitability.

 

Sun Pharma is India's leading pharmacuetical company by formulation sales and its growing innovative medicines' portfolio, which accounted for 22% of its revenues in the financial year 2025-26 (Apr-Mar), reduces exposure to generics, the rating agency said. The Organon acquisition also creates potential sales opportunities through cross-selling across the two portfolios, expanding the company's products into new markets using Organon's commercial infrastructure and scaling Organon's portfolio across India and other markets.

 

While Organon's performance track record has been inconsistent, including pricing pressures in established brands and governance lapses, it should benefit under Sun Pharma's ownership from a deeper capital base, disciplined financial policies, and its established capabilities. "Sun's strong integration track record mitigates these risks, having successfully absorbed more than 20 acquisitions, including transformational transactions such as Ranbaxy and Taro. While Organon is larger and more complex than any of Sun's prior deals, Sun's proven execution capabilities and conservative financial management provide important offsets," Moody's said.

 

Sun Pharma has "excellent" liquidity, supported by sizeable cash balances and strong free cash flow generation. The company held around $3.6 billion cash as of Mar. 31, and has also secured a committed acquisition financing bridge loan of $12 billion from a broad syndicate of international banks for its acquisition of Organon.

 

The rating may be upgraded if the company successfully integrates Organon, including remediating historical governance lapses, realises the identified synergies, and continues to expand its innovative medicines portfolio and sustains margin growth. A downward rating may emerge if the company's deleveraging post-acquisition falls behind expectations or if it adopts a more aggressive policy such as large debt-funded acquisitions, Moody's said.

 

For the June quarter, Sun Pharma had reported consolidated net profit of INR 28.95 billion on revenues of INR 153 billion. Tuesday, its shares ended at INR 1,885.90 on the National Stock Exchange, down 0.5% from Monday.  End

 

Reported by Ashutosh Pati

Edited by Shubhayan Bhattacharya

 

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