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Informist, Saturday, Oct.17, 2026

 

By Narayana Krishna

 

HYDERABAD - Sun Pharmaceutical Industries Ltd.'s September quarter earnings are expected to be driven by healthy growth in its domestic formulations business, emerging markets, and global innovative portfolio, while weakness in the US generics business is likely to weigh on overall performance. The company is projected to report muted net profit growth for the reporting quarter, while its sales are expected to see moderate growth, according to analysts.

 

Brokerages expect continued traction in specialty medicines and semaglutide products to support growth, while margins may remain under pressure due to US pricing headwinds, the absence of generic Revlimid sales, and higher research and development spending.

 

Sun Pharma is expected to report a consolidated net profit of nearly INR 31.2 billion for the September quarter, flat on year, according to the average of estimates from 14 brokerages. Revenues are estimated at INR 157.7 billion, up nearly 9% on year from INR 144.1 billion. On quarter, net profit is likely to rise nearly 1%, while net sales are seen to grow over 3%.

 

The lowest net profit estimate of INR 28.2 billion is from Motilal Oswal Financial Services Ltd. and the highest estimate of INR 34.2 billion is from JM Financial Institutional Securities Pvt. Ltd. Revenue estimates range from INR 150 billion from ICICI Securities Ltd. to INR 161 billion from Choice Equity Broking Pvt. Ltd.

 

US BUSINESS

Sun Pharma's US business is expected to remain under pressure due to the absence of generic Revlimid sales, pricing headwinds, and limited new product launches. ICICI Securities Ltd. expects US sales to decline 7% on year to $461 million, while Nuvama Wealth Management Ltd. projects a 6?cline in constant-currency terms, citing continued erosion in the generics business and the loss of generic Revlimid sales. HDFC Securities Ltd. expects generic sales to remain flat sequentially.

 

However, growth in the specialty portfolio is expected to partly offset the weakness in generics. Kotak Securities Ltd. expects US sales to rise 5% sequentially to $450 million, driven primarily by higher specialty sales. Systematix Shares and Stock (India) Ltd. also expects continued traction in specialty products, led by skin cancer drug Unloxcyt, to partly offset weakness in the generics business.

 

Sun Pharma's global specialty and innovative products portfolio is expected to remain an important growth driver, partly cushioning the weakness in US generics, according to analysts. The specialty products segment sales are seen to grow around 15% on year, according to HDFC Securities, while ICICI Securities projects a rise of 11%. Kotak Securities expects global specialty sales to rise 13% on year and 7% sequentially to $375 million, led by continued traction in dermatology drugs Unloxcyt, autoimmune drug Leqselvi, and acne treatment drug Winlevi. Nuvama Wealth estimates global innovative product revenue at $388 million, including a combined contribution of $25 million from Unloxcyt and Leqselvi.

 

INDIA BUSINESS

The domestic formulations business is expected to remain a key growth driver, supported by new launches, prescription growth, and traction in branded generics, according to analysts. HDFC Securities projects India revenues to rise 16% on year, while both ICICI Securities and Kotak Securities expect growth of 15%. Motilal Oswal, Nuvama Wealth and SMIFF Ltd. project growth of 14?ch.

 

Systematix Shares expects Sun Pharma's September quarter domestic sales growth to outpace the Indian pharmaceutical market growth. It expects investors to focus on the market share of Sun Pharma's glucagon-like peptide-1 products and the contribution of volumes, new launches and pricing to growth. Semaglutide, a GLP-1 medicine used in the treatment of type 2 diabetes and, in certain formulations, weight management, is expected to support domestic sales. Choice Equity expects continued traction in semaglutide products in India to contribute to revenue growth.

 

EMERGING MARKETS, OTHER REGIONS

Emerging markets and other international markets are expected to provide additional support to revenue growth, driven by branded generics and innovative products, according to analysts. Kotak Securities expects growth of 11% on year in the rest of the world and emerging markets combined for the quarter, while Motilal Oswal projects growth of 12.5% in emerging markets and 6% in the rest of the world. SMIFF expects emerging markets and the rest of the world to grow 12% and 9%, respectively.

 

Motilal Oswal attributes the expected growth in these regions to traction in branded generics sales and innovative products portfolio. Prabhudas Lilladher Pvt. Ltd. also expects emerging markets and other international markets to support overall revenue growth for the quarter. Choice Equity expects growth in emerging markets to help Sun Pharma offset US pricing headwinds.

 

EBITDA AND MARGINS

Sun Pharma's consolidated earnings before interest, tax, depreciation, and amortisation margin for the September quarter is estimated in the range of 26.3% to 29.3% against 31.3% a year ago. The lowest estimate of 26.3% is from HDFC Securities, while both Choice Equity and Prabhudas Lilladher have the highest estimates at 29.3%.

 

Choice Equity expects Sun Pharma's September EBITDA margin to decline 200 basis points on year due to pricing headwinds, while 360 ONE Capital Market Ltd. expects it to fall to 29%. Kotak Securities projects a 50 bps on-year decline and a 30 bps sequential fall in margin, despite 7% on-year growth in EBITDA to INR 44 billion. It expects gross margin to remain broadly flat sequentially at 80.5%, as higher raw material costs are partly offset by increased US sales. Research and development spending is projected at 5.9% of sales for the quarter, up 50 bps sequentially.

 

Nuvama Wealth expects EBITDA to grow 10% on year, with margins seen at 28.2%, as the loss of generic Revlimid sales and incremental spending on the innovative business weigh on profitability, particularly in the US.

 

The average of 12 estimates for Sun Pharma's September quarter EBITDA is pegged at INR 44.3 billion, while they range from INR 38.2 billion to INR 46.4 billion.

 

Sun Pharma is scheduled to announce Jul-Sept earnings on Oct. 30. Analysts are looking for the company's commentary on progress of its proposed acquisition of US-based Organon & Co., including the completion timeline and the acquired business' performance. Other key issues to be tracked include the growth of the global specialty portfolio, the ramp-up of Leqselvi and Unloxcyt, semaglutide traction across key markets, and the performance of the domestic branded generics business.

 

Friday, shares of Sun Pharma ended at INR 1,758.80 apiece on the National Stock Exchange, down marginally from Thursday. The stock is down nearly 12% since the announcement of its June quarter earnings on Jul. 31.

 

Of the 18 research reports on the company available with Informist, 16 have a "buy" or equivalent rating on the stock with an average target price of INR 2,148. This is over 22% higher than the current market price. One brokerage has a "hold" rating on the stock with a target price of INR 2,090 and one has a "sell" rating with a price target of INR 1,848. 

 

Following are the Jul-Sept earnings estimates for Sun Pharmaceutical Industries from 14 brokerages in descending order of the net profit estimate, in INR billion:

 

Brokerages	Net Sales	Net Profit	EBITDA
JM Financial Institutional Securities Pvt. Ltd.	159.39	34.20	46.19
Choice Equity Broking Pvt. Ltd.	161.24	33.77	--
Prabhudas Lilladher Pvt. Ltd.	158.08	33.19	46.38
360 ONE Capital Market Pvt. Ltd.	159.00	32.52	--
HDFC Securities Ltd.	160.72	31.91	46.29
Kotak Securities Ltd.	158.24	31.45	43.95
Nuvama Wealth Management Ltd.	160.64	31.44	45.25
Systematix Shares and Stocks (India) Ltd.	156.97	31.01	44.99
SMIFS Ltd.	157.13	30.98	45.20
Nirmal Bang Equities Pvt. Ltd.	158.79	30.06	44.64
Elara Securities (India) Pvt. Ltd.	157.28	29.83	44.49
ICICI Securities Ltd.	150.28	29.67	43.43
YES Securities (India) Ltd.	153.55	28.24	38.21
Motilal Oswal Financial Services Ltd.	156.32	28.20	42.44
Average	157.69	31.18	44.29

 

End

 

US$1 = INR 94.96
 

Edited by Shubhayan Bhattacharya

 

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