Sun Pharma Share Price closed higher on Friday, November 1, 2026, even as the company reported a significant decline in its September-quarter earnings. The stock gained 0.87% to finish at ₹1,778.25 on the BSE, showing resilience despite pressure on its reported profitability.
For the second quarter of FY27, Sun Pharmaceutical Industries posted consolidated net profit of ₹1,988.53 crore, down 36.36% from ₹3,124.95 crore in the same quarter last year. Higher exceptional expenses related to US litigation and the proposed acquisition of Organon contributed to the decline.
However, the company’s revenue performance remained encouraging. Revenue from operations increased 11.9% year-on-year to ₹16,198.71 crore, compared with ₹14,478.31 crore in the corresponding quarter of the previous financial year.
India Business Leads Sun Pharma’s Revenue Growth
India continued to play a major role in the company’s performance. Domestic formulation sales climbed 17.3% year-on-year to ₹5,552.3 crore, accounting for 34.5% of consolidated revenue.
Sun Pharma also reported growth in its global innovative medicines business. Sales in this segment increased 6.9% to approximately $356 million, representing 21.1% of total sales. Emerging markets contributed another 20.7% to consolidated revenue.
During its earnings call, management highlighted demand for innovative products such as Ilumya, Ciqua and Odumzo across the US and international markets.
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US Litigation and Organon Deal Costs Affect Profit
Despite healthy revenue growth, higher expenses put pressure on quarterly earnings. Total expenses increased to ₹12,287.83 crore from ₹10,780.62 crore a year earlier.
The company reported exceptional charges of approximately ₹1,269 crore. These included:
- ₹923 crore: Settlement expenses related to a US generic-drug pricing antitrust case.
- ₹346 crore: Costs associated with the proposed Organon acquisition.
Management indicated that additional transaction-related expenses may arise before the acquisition is completed.
Sun Pharma expects the Organon deal to close by early 2027, subject to the completion of customary closing conditions.
Sun Pharma’s EBITDA and Adjusted Profit
The company’s operating performance remained relatively stable. EBITDA increased 4.8% year-on-year and 7.4% sequentially to ₹4,743.9 crore. However, the EBITDA margin declined by 198 basis points to 29.3%.
According to Choice Institutional Equities, adjusted net profit stood at ₹2,792.4 crore after excluding exceptional expenses of ₹1,268.8 crore. This provides a clearer picture of the company’s underlying quarterly performance.
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Sun Pharma: Should Investors Buy, Sell or Hold?
Choice Institutional Equities has maintained its Buy recommendation on Sun Pharma, with an unchanged target price of ₹2,300. Based on the October 31 closing price of ₹1,778, the target indicates a potential upside of around 29.9%.
The brokerage believes Sun Pharma has several growth drivers, including its strong position in India’s pharmaceutical market, product launches and expansion in specialty and innovative medicines.
However, the US business could face near-term challenges due to declining sales of lenalidomide and slower growth in Ilumya. Stronger performance in India and emerging markets may help offset some of this pressure. The brokerage expects Ilumya’s performance to stabilise over the next two to three quarters.
In India, Sun Pharma continues to benefit from its established market position and growth in the semaglutide segment. The company launched 15 products during the September quarter, which could support future domestic sales.
Choice Institutional Equities has reduced its FY27 and FY28 earnings estimates by 3.6% and 1.1%, respectively, to account for expected weakness in the US market. Nevertheless, it projects an 11.7% revenue compound annual growth rate (CAGR) over the next three years, excluding Organon’s contribution.
Key Takeaway
Sun Pharma’s September-quarter results present a mixed picture. Revenue growth across India and international markets remains encouraging, but exceptional expenses have significantly affected reported profits. Investors will likely monitor the Organon acquisition, US business performance and growth in innovative medicines in the coming quarters.
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Disclaimer: This article is for informational and educational purposes only. The brokerage views and target prices mentioned belong to the respective analysts and do not represent guaranteed returns or investment advice. Investors should conduct their own research or consult a SEBI-registered financial adviser before making investment decisions.
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