New launches and R&D pipeline bolster Sun Pharma’s long-term growth outlook – News Air Insight

ET Intelligence Group: Sun Pharmaceutical Industries reported strong growth in the global speciality business and resilient domestic sales for the September quarter even as the US generics segment faced headwinds. Though operating expenses are likely to remain elevated for the remainder of the financial year given ramp up of the speciality pipeline, recent product launches are expected to support long-term growth. Analysts have maintained ‘BUY’ with an upside of 11-18% to Friday’s closing of ₹1,692.8.

Sun Pharma’s upcoming launches include Unloxcyt (cosibelimab for skin cancer) in the second half of FY26 and Leqselvi (for alopecia areata), which has already seen positive prescriber response. Ilumya’s label expansion for psoriatic arthritis is also expected in the second half of the financial year. The drug maker is preparing to enter the GLP-1 segment with Semaglutide in India, targeting diabetes and obesity markets.

The company’s speciality portfolio including flagship products Ilumya, Cequa, Winlevi and Odomzo continued to outperform, with global speciality sales growing 16% year-on-year to $333 million. While the speciality segment soared, the company’s US generics business remained subdued due to increased competition and declining sales of Revlimid. The company does not expect significant recovery in this segment in the near term.

The domestic formulations business grew 11% year-on-year to ₹4,734.8 crore, maintaining its leadership in the Indian pharmaceutical market with an increase in market share to 8.3% from 8%. The company launched nine new products during the quarter, reinforcing its branded portfolio.

On a year-on-year basis, Sun Pharma’s revenue and net profit grew 8.6% and 2.6% to ₹14,405.2 crore and ₹3,118 crore, respectively in the September 2025 quarter. operating profit before depreciation and amortization (Ebitda) grew 14.9% to ₹4,527.1 crore while Ebitda margin improved 170 basis points to 31.3%.

Sun Pharma spent at ₹782.7 crore on research and development (R&D) during the quarter, which was 5.4% of revenue and speciality R&D accounted for around 38% of the total spend. The overall R&D spend is expected to be 6-8% of revenue for FY26. The company’s R&D pipeline includes six novel entities in clinical stage. Its 117 ANDAs await US FDA approval, including 31 tentative approvals. During the quarter, four ANDAs were filed, and approval received for five ANDAs. Analysts remain bullish on the company’s long-term prospects. Prabhudas Lilladher Capital maintained a ‘Buy’ rating with a target price of ₹1,875, citing strong visibility in speciality and rest of the world (RoW) growth. Emkay retained ‘BUY’ with a target price of ₹2,000, while Elara Securities upgraded its estimate by 5% to ₹1,968, reflecting improved margin outlook and sustained speciality momentum.