Sun Pharmaceutical: Domestic, innovation push eyed; Nuvama maintains 'Hold'

Sun Pharma aims to strengthen its domestic formulations business through field force expansion and a generic GLP-1 launch in CY26.

Domestic berokrage Nuvama Institutional Equities (Nuvama) has reiterated its ‘Hold’ rating on Sun Pharmaceutical Industries (Sun Pharma) stock with a target price of ₹1,830, citing a cautious stance despite the company’s domestic and innovation-led growth levers. 

 

Analysts said their call is based on the company’s ongoing management changes, field force expansion plans, and early traction in its US innovative business.

 

Sun Pharma has seen a management reshuffle recently, with Jayashree Satagopan appointed as chief financial officer (CFO), Kirti Ganorkar elevated as managing director (MD), and Richard Ascroft taking charge as chief executive officer (CEO) of North America. The company aims to strengthen its domestic formulations business through field force expansion and a generic GLP-1 launch in CY26. According to Nuvama analysts, “field force productivity would remain flattish until additions slow down.”

 

 

In the innovative medicines segment, Sun Pharma’s recently launched Leqselvi in the US has shown promising early signs. “The initial impression of Leqselvi’s US launch seems encouraging, but it will take a couple of years to stabilise,” analysts said. The ramp-up of innovation has already contributed to a ~500bps margin expansion.

 

Sun Pharma remains optimistic on Ilumya, its key psoriasis therapy, even as Johnson & Johnson’s oral IL-23 candidate Icotrokinra posted equivalent efficacy data. Management believes Ilumya’s “medical benefit advantage” should help it hold ground. The drug has also met the primary endpoint in psoriatic arthritis trials, with detailed results awaited. Meanwhile, Unloxyt is expected to see a commercial launch in H2FY26.

 

On capital allocation, Sun Pharma is expected to prioritise domestic formulations and innovation, with selective inorganic moves. However, with Halol and Mohali plants facing compliance issues, the company plans to add new capacity in Madhya Pradesh, which could take four-five (4-5) years.

 

Going forward, analysts at Nuvama forecast a 9 per cent revenue compound annual growth rate (CAGR) and 8 per cent profit after tax (PAT) CAGR over FY25-27, alongside a 100bps margin improvement. However, the effective tax rate is seen inching up, partly offsetting gains.

 

Summing up, the brokerage said, “Sun Pharma will continue to focus on domestic formulations and innovative medicines… but we retain ‘Hold’ with an unchanged target price (TP) of ₹1,830 (31x FY27E EPS).”

Sun Pharma share price history

 

Sun Pharma share price has remained under pressure over recent months. In the past month, the stock has declined 1.8 per cent, while over the last three months it has slipped 2.07 per cent and fallen 8.87 per cent in the past six months. The stock’s 52-week high stands at ₹1,960, hit on September 30, 2024, and its 52-week low is ₹1,555, recorded on March 5, 2025.