Analyst Concall
Sun Pharma sees FY26 R&D spend close to 6% of revenue
This story was originally published at 21:32 IST on 5 November 2025
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--See R&D spend at lower end of 6-8% guidance overall in FY26
--Hope to launch Semaglutide in India soon after patent expires
--Not clear of timelines for Semaglutide launch in Canada
--US tariff situation fluid, hard to predict impact on drug sales
--Believe generics will remain excluded from any US tariff
--Have manufacturing footprint in US, open to all options
By Sunil Raghu and Simran Rede
MUMBAI – Sun Pharmaceutical Industries Ltd. sees its research and development spend at the lower end of 6-8% of its revenue in 2025-26 (Apr-Mar), the company's management said in a post-earnings call with analysts Wednesday. Sun Pharma spent INR 7.83 billion, or 5.4% of total sales on R&D in the September quarter. In Apr-Sept, the R&D spent was INR 16.86 billion, or 6% of sales. The company said its R&D spend is focussed on both the specialty and generic businesses and the company continues to invest in building the pipeline for various markets.
Sun Pharma Wednesday reported a consolidated net profit of INR 31.18 billion for Jul-Sept, up nearly 3% on year. Its revenue from operations rose nearly 9% on year to INR 144.78 billion. Analysts had projected Sun Pharma's September quarter net profit at INR 29.4 billion on revenue of INR 142.5 billion.
Sun Pharma reported a 4.1% on-year drop in US formulation sales in the September quarter to $496 million, it said in a press release. US formulations account for 30.1% of the company's total sales. The fall in US sales was because of a decline in its generics business due to increased competition, which was offset by growth in innovative or specialty drugs portfolio. The US sales of innovative medicines surpassed generics for the first time during the September quarter.
Talking about the proposed 100% US tariffs on branded and patented products, the management said that the situation was fluid and while it was not paying any additional tariffs, it was hard to predict the impact on drug sales currently. The Donald Trump administration in the US was to levy 100% tariffs on branded and patented pharmaceutical products from Oct. 1 but neither has it been imposed nor has the policy been formally revoked. If implemented, Sun Pharma could feel the heat as its exports of such products account for nearly 17% of total revenue. Sun Pharma had reported global sales of $1.22 billion from patented products in FY25. Of this, the US market had accounted for nearly $1.1 billion. "We believe that generics are already excluded. We believe that will continue to be the case. And it's unclear at this point what the impact will be on brands," the management said.
On being asked whether the company would consider shifting manufacturing to US if the Trump administration insists, the company said that though it already has its manufacturing footprint there, they were open to "all options". "We are constantly assessing that manufacturing footprint and we are open to considering moves to the US in due time," the management said. This appears to be a deviation from the management's earlier stance. The management, while answering the query of analysts after the June-quarter earnings, had replied in the negative when asked of any plans on its manufacturing footprint in the US.
On the status of its filing with Health Canada for launch of semaglutide, Sun Pharma said they are not clear about the timeline for launch of this diabetes and anti-obesity drug in the North American nation. However, the management said that they are ready for its launch in India in the first wave when the loss of exclusivity happens or "the patent expires". The India formulation sales accounted for 32.9% of the total consolidated sales in the September quarter and the company reported an 11% on-year rise in its revenue to INR 47.35 billion.
On Tuesday, shares of Sun Pharma ended nearly 1% lower at INR 1,690 on the National Stock Exchange. End
Edited by Ashish Shirke
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