Sun Pharma stock slips 2% in firm market, nears 52-week low; here's why

Thus far in the calendar year 2025, Sun Pharma stock has underperformed the market by falling nearly 17 per cent, as compared to 2 per cent rise in the BSE Sensex.

Sun Pharmaceutical Industries share price

 

Shares of Sun Pharmaceutical Industries (Sun Pharma) slipped 2 per cent to ₹1,556.25 on the BSE in Monday's intra-day trade in an otherwise firm market. The stock price of the drug maker was trading close to its 52-week low of ₹1,555 touched on March 3, 2025. In comparison, the BSE Sensex was up 0.52 per cent at 80,226 at 12:49 PM.

 

In the past four trading days, the stock price of Sun Pharma has declined 6 per cent. Thus far in the calendar year 2025, the stock has underperformed the market by falling nearly 17 per cent, as compared to 2 per cent rise in the BSE Sensex.

 

 

Why Sun Pharma stock is underperforming in calendar year 2025?

 

The President of the United States of America (US) sent letters to several global pharmaceutical companies asking them to provide medicines at Most Favoured Nation prices in the US. However, Sun Pharma on August 1, 2025, said the company is not among the recipients of the letter cited above. There is no company-specific development, it added. 

 

Sun Pharma in the April to June 2025 quarter (Q1FY26) earnings call said the US business grew by 1.4 per cent to $473 million. This growth is driven by the company’s innovative medicines portfolio with all of growth products contributing including Ilumya, Cequa, Winlevi, and Odomzo, but offset by decline in the company’s generics business due to additional competition in certain products. The US accounted for 29.3 per cent of consolidated sales for the quarter.

 

Overall, while the US pharmaceutical market remains on a growth trajectory driven by innovation and continued brand strength, pricing pressures and competitive dynamics are expected to intensify over the period, Sun Pharma said in its FY25 annual report.

 

Despite looming tariff risks, product launches and market expansion remained steady, though pricing pressure persisted in generics. Notably, Dr Reddy’s, Sun Pharma and Zydus Lifesciences continued to see declines in gRevlimid, which Choice Equity Broking believes are manageable with a stronger pipeline and product mix.

 

Margins mirrored the EBITDA trend. While near-term margin expansion may remain subdued as companies invest in building long-term product pipelines (notably in Biosimilars and Peptides), the brokerage firm in its pharma sector report said that they expect structural benefits to accrue over time as these high-margin products scale up.

 

In July 2025, Sun Pharma launched Leqselvi after receiving a favourable ruling and settlement with the innovator. Management indicated that Unloxcyt launch has been pushed to H2FY26. Analysts at BNP Paribas India expects Sun Pharma’s global specialty business along with domestic business outperformance to drive revenue growth and improve the company’s EBITDA margin by 300bp over FY25-28. The brokerage firm increased its FY26-28 EBITDA margin by 30bp as analysts expect improved gross margins. However, the brokerage firm reduced its FY26-28 EPS estimates by 6-7 per cent to factor in the higher tax rate.

 

Meanwhile, on overall outlook, Sun Pharma said that the company anticipates mid to high single-digit consolidated topline growth in FY26, and expect its Global Specialty business to continue on its growth path. 

 

On weakness, Sun Pharma said the increased competitive intensity in the US generics pricing environment, coupled with faster paced generic drug approvals by the USFDA. The potential for government-mandated price controls in response to high global government deficits, impacting product pricing.

 

The rising regulatory scrutiny and potential government actions to control drug prices across global markets and threat from government actions such as the imposition of tariffs and changes in payment models, including application of Most Favoured Nations model are among threats for the company, Sun Pharma said in its annual report.