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Sun Pharma revenues grew ~10 percent YoY to Rs 15300 crore

ICICIdirect Research 03 Aug 2026 DISCLAIMER

News: Sun Pharma revenues grew ~10% YoY to ₹ 15300 crore driven mainly by strong growth in India, global specialty portfolio, RoW and Emerging Markets. India growth was strong at ~16% to ₹ 5475 crore. The US was flat with a revenue of ₹ 4042 crore (CC term 9.7% de-growth) due to lenalidomide erosion and increased competition in certain generic products. RoW markets reported growth of ~10% to ₹ 2069 crore, mainly due to growth in both generics and specialty. Emerging markets grew ~15% to ₹ 2946 crore, driven by generics and specialty besides currency benefits. Global Specialty sales came in at US$ 351 million, a growth of ~13% YoY. EBITDA stood at ₹ 4296 crore, up ~5% YoY, with resulting EBITDA margins of 28% (down 133 bps YoY), GPM grew by ~95 bps to ~81%. Net profit came in at ~₹2753 crore, up ~34% YoY, while including for Forex gains Net profit is ~₹3019 crore up ~5% YoY.

View: Overall better product mix with higher domestic sales and specialty business aided solid GPM performance but could not reflect into better EBITDA margins due to higher other expenses and R&D spend. The India business continued to deliver volume-driven growth. On the exports front, the company remains strategically focused on specialty business which is evident from a significant increase in R&D allocation towards Specialty. However, more than results the investors focus would be firmly on the Organon integration. Sun Pharma will assume ~US$ 9.25-9.75 billion of Organon debt (assuming US$2-2.5 billion payment through internal accruals), taking pro-forma Net Debt/EBITDA to ~2.3x. Prima facie, the acquisition appears strategically challenging, with execution risks and limited near-term growth levers. Our apprehension stems from the fact that only one-third of the portfolio (Innovative+ biosimilar) is a growth engine and the combined entity has to sweat a lot for the remaining 2/3rd (generics+ established). With significant leverage, the margin of safety is also low. Although Sun enjoys a good acquisition track record, this one is by far the most significant and hence we remain cautiously optimistic.

Impact: Neutral

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