Sun Pharma down 2%, stock hits over 5-month low

Thus far in the calendar year 2026, Sun Pharma outperformed the market and remained flat, as compared to a 14.7% decline in the BSE Sensex.

Sun Pharmaceutical share price movement

 

Share price of Sun Pharmaceutical Industries hit an over five-month low of ₹1,733.15, falling 2 per cent on the BSE in Wednesday’s intra-day deals. The stock price of the drug company quoted at its lowest level since April 28, 2026.

 

On Monday, October 12, the board of directors of Sun Pharma approved the issuance of listed, rated, unsecured, redeemable non-convertible debentures (NCDs), on a private placement basis, in one or more tranches and/or series, for an aggregate amount not exceeding ₹10,000 crore.

 

Meanwhile, the market price of Sun Pharma declined 15 per cent from its 52-week high of ₹2,047.55 touched on July 31, 2026. However, thus far in the calendar year 2026, the stock outperformed the market and remained flat, as compared to a 14.7 per cent decline in the BSE Sensex.

 

 

Sun Pharma is India's largest pharmaceutical company (by formulation sales) and one of the world's leading producers of generics, branded generics and active pharmaceutical ingredients (APIs). 

 

Sun Pharma – Crisil Ratings rationale

 

On October 13, Crisil Ratings assigned its ‘Crisil AAA/Stable’ rating to the proposed non-convertible debentures of Sun Pharma and reaffirmed its ‘Crisil AAA/Stable/Crisil A1+’ ratings on the existing bank facilities and commercial paper programme.

 

Crisil said the ratings continue to reflect the leadership position of Sun Pharma in the domestic formulations segment, its strong presence in the US and other regulated markets with a robust specialty products portfolio and strong financial risk profile. These strengths are partially offset by exposure to regulatory risk and susceptibility to intense competition and US policy uncertainties.

 

Meanwhile, Sun Pharma’s operating performance remained healthy in the first quarter (April to June) of fiscal 2027 (Q1FY27), with operating income increasing by around 10 per cent year-on-year (YoY) to ₹15,300 crore, driven by strong growth in the India formulations and global innovative medicines businesses.

 

India formulations sales grew 16 per cent YoY to ₹5,475 crore, while global innovative medicines sales increased 13 per cent to $351 million and constituted around 22 per cent of consolidated sales; this was partly offset by a 10 per cent decline in US formulations sales amid continued weakness in the generics business. Operating profit increased 2.7 per cent to ₹4,418 crore, though operating margin moderated to 29 per cent from 31.1 per cent in the corresponding period of the previous fiscal.

 

While Sun Pharma’s agreement with the US administration provides some mitigation against tariff-related risks for a two-year period, after which the arrangement is subject to review, the evolving policy environment in the US, particularly implementation of Most Favoured Nation (MFN)-linked drug pricing measures and tariffs on pharmaceutical products, and their consequent impact on realisations and operating profitability, will remain monitorable, Crisil Ratings said.

 

Meanwhile, Sun Pharma faces intense competition in the US generics market with the introduction of authorised generics, customer consolidation, faster pace of ANDA approvals by the US Food and Drug Administration (USFDA), and healthcare cost-containment measures by the US government. Also, players in the US and Europe remain vulnerable to pricing pressure on account of entry of several cost competitive Indian players. Increasing competition in the international markets and R&D cost could constrain the operating margin, Crisil Ratings said.

 

However, risks from potential US tariffs remain monitorable. Sun Pharma’s agreement with the US administration to supply its Medicaid portfolio at lower prices provides some mitigation against tariff-related risks for a two-year period, after which the arrangement is subject to review. Furthermore, uncertainty around potential US tariffs for the generics portfolio, which is currently exempt from tariffs, will remain a key monitorable, the rating agency said.

 

InCred Equities view on Sun Pharma

 

India remains the anchor, with Sun Pharma holding the top Indian Pharmaceutical Market (IPM) rank at an 8.4 per cent share, and secondary sales up 13.9 per cent YoY in August 2026 against 10.7 per cent for the market, after 16.0 per cent India growth in Q1FY27, analysts at InCred Equities said in the pharma sector report.

 

The US market is expected to stay soft as the lenalidomide contribution rolls off, partly offset by the innovative franchise and the September 1, 2026 launch of Taro's generic Concerta, the first osmotic-release equivalent. 

 

“On September 1, 2026, Sun Pharma agreed to extend MFN pricing to US state Medicaid programmes and future innovative launches, in return for a zero Section 232 rate until January 20, 2029 and an exemption from the GLOBE Medicare Part B model, a trade we value at ₹150 crore-₹250 crore a year,” the brokerage firm said.

 

Emerging markets add generic semaglutide, launched in South Africa on July 24, 2026 and approved in Brazil on July 29, 2026. The lerodalcibep licence, a PCSK9 inhibitor covering markets outside the US and China with EU approval on September 21, 2026, is an FY28F story. 

 

After Q1FY27 EBITDA grew by only 2.7 per cent YoY, margin delivery on a thinner lenalidomide base is the key watch item, with the tax rate guided at 27.8 per cent until Organon closes. Organon stockholders approved the deal on July 23, 2026, and the closure stays as expected, in early 2027F, analysts said. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.