Sun Pharma growth momentum to sustain post Q3 profit jump, say brokerages

Sun Pharma reported a 16 per cent year-on-year (Y-o-Y) growth in its consolidated profit after tax (PAT) at ₹3,369 crore for Q3FY26

Analysts remained positive on Sun Pharmaceutical Industries Ltd. after it reported a jump in profit for the third quarter of the financial year (Q3FY26), citing a continued momentum in India and emerging markets. 

 

The drug-maker reported a 16 per cent year-on-year (Y-o-Y) growth in its consolidated profit after tax (PAT) at ₹3,369 crore for Q3FY26, while revenue from operations during the period grew by 13.5 per cent to ₹15,520 crore. 

 

On a sequential basis, the net profit rose by 8 per cent, with the revenue also growing by 7.2 per cent. United States (US) formulations sales stood at $477 million, marginally up by 0.6 per cent due to the decline in generics business. Emerging markets formulations sales stood at $337 million, growing by 21.6 per cent.

Analysts on Sun Pharma earnings 

Systematix Institutional Equities said the key earnings catalysts for the stock remain continued momentum in India and emerging markets, along with an innovation-led portfolio driven by the ramp-up of recent launches such as Leqselvi and Unloxcyt. The brokerage added that any potential inorganic initiative could further accelerate earnings growth.

 

However, Systematix noted that resolution of pending compliance issues at manufacturing plants remains critical, as monetisation of the ANDA and NDA pipeline is contingent on these approvals.

 

The brokerage tweaked its forecasts and estimates revenue, Ebitda and net profit to grow at a compound annual growth rate of 9 per cent, 11 per cent and 11 per cent, respectively, over FY25-28. It retained its 'Buy' rating on the stock, with a revised target price of ₹2,392 per share.

 

JM Financial said the company is on track to outperform its single-digit growth guidance for FY26. The brokerage noted that strong momentum in India and the rest of the world and emerging markets is encouraging and is likely to sustain over the next two years, led by specialty products and glucagon-like peptide-1 launches.

 

JM Financial added that while the US generics business may remain subdued, two new specialty launches and continued momentum in Ilumya are expected to drive the United States specialty business at a high-teens growth rate. The brokerage said the key overhang for the stock remains uncertainty surrounding the implementation of most-favoured-nation rules in the US.

 

Analysts at Motilal Oswal said it remains positive on the stock, citing robust traction in innovative medicines, new launches, and market share gains in its domestic formulations business, as well as steady execution across the rest of the world and emerging markets. The company maintained its 'Buy' stance on the stock.

 

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