Sun Pharmaceutical Industries reported robust consolidated financial results for Q4 FY26, showcasing significant profit and revenue growth, even as its crucial US generics business continues to face challenges, prompting a strategic pivot towards innovative medicines and increased R&D investment.
Photograph: Francis Mascarenhas/Reuters
Key Points
- Sun Pharma’s consolidated net profit for Q4 FY26 increased 26 per cent year-on-year to ₹2,714 crore, with revenue up 13 per cent to ₹14,611 crore.
- The company’s US generics business continues to face pressure, leading to a 0.9 per cent decline in full-year FY26 US sales to $1,904 million.
- Growth in innovative medicines, including the US innovative medicines business crossing the $1 billion revenue milestone, is partly offsetting the generics decline.
- Sun Pharma is increasing R&D investments, with Q4 FY26 R&D spend at ₹975 crore, focusing on specialty and innovative medicines.
- The recent acquisition of Organon is expected to complement Sun Pharma’s existing portfolio, add a biosimilars business, and strengthen its innovative and branded generics segments.
Sun Pharmaceutical Industries reported strong consolidated numbers for the March quarter and the full financial year of FY26, even as weakness in its US generics business continued to weigh on performance in its largest overseas market.
The company’s consolidated net profit for Q4 FY26 rose 26 per cent year-on-year (Y-o-Y) to Rs 2,714 crore, while revenue from operations increased 13 per cent to Rs 14,611 crore, supported by robust growth across markets.
On a sequential basis, however, profit and revenue declined 19 per cent and 6 per cent, respectively.
For the full financial year FY26, consolidated net profit increased 5 per cent to Rs 11,479 crore, while revenue from operations rose 11 per cent to Rs 58,462 crore.
The results were announced during market hours. Sun Pharma shares fell 2.4 per cent to close at Rs 1,845.2 apiece on the BSE.
Weakness Partly Offset by Growth in Innovation
The company, however, continued to face pressure in the US market due to weakness in the generics business, partly offset by growth in innovative medicines.
For the full year FY26, Sun Pharma’s US sales declined 0.9 per cent to $1,904 million from $1,921 million in FY25, reflecting pressure in one of its most important overseas markets.
The year saw mixed quarterly trends in the US business. In Q1 FY26, sales rose 1.5 per cent Y-o-Y to $473 million from $466 million.
However, Q2 performance weakened, with revenue falling 4.1 per cent to $496 million compared with $517 million a year ago.
Some recovery was seen in Q3, when US sales edged up 0.6 per cent to $477 million from $474 million, driven by growth in the specialty and innovative medicines portfolio.
In Q4 FY26, US formulation sales stood at $459 million, down 1.1 per cent from $464 million in the corresponding quarter last year.
The company said continued growth in innovative medicines helped offset the decline in the generics business.
The US market contributed around 28.8 per cent of Sun Pharma’s consolidated sales during the quarter.
Focus on R&D and Product Pipeline
The company continued to increase investments in research and development (R&D) as it sharpened focus on specialty and innovative medicines.
Founder and executive chairman Dilip Shanghvi said consolidated R&D investment for Q4 FY26 stood at Rs 975 crore, accounting for 6.7 per cent of sales, while innovative R&D contributed 36.9 per cent of the total R&D spend.
The company expects FY27 R&D expenditure to remain between 6 and 7 per cent of sales and has guided for high single-digit consolidated top line growth in FY27, subject to the regulatory and macroeconomic environment.
Sun Pharma continued to strengthen its US product pipeline during FY26.
The company currently has 552 approved abbreviated new drug applications (ANDAs) in the US market, while 122 ANDA filings remain pending approval from the US Food and Drug Administration, including 28 tentative approvals.
During the quarter, the company filed seven ANDAs and received approvals for two.
Kirti Ganorkar, managing director of the company, said the US innovative medicines business crossed the $1 billion revenue milestone during FY26, underscoring the growing contribution of specialty therapies to Sun Pharma’s global strategy.
Ganorkar added that Sun Pharma’s innovative medicines business outside the US is also gaining traction, supported by the continued expansion of Illumya into newer markets.
The treatment has now been launched in 40 countries, up from 35 a few quarters ago, while the broader non-Illumya specialty portfolio continues to see growth across international markets.
The company also said it is looking for a partner in the US market for the further development of MM-II, a novel non-opioid intra-articular injection being jointly developed with Moebius Medical for knee osteoarthritis pain treatment.
Sun Pharma said it would continue investing in recently launched specialty products Leqselvi, used for severe alopecia areata, and Unloxcyt, a therapy for a type of skin cancer, with spending on these products becoming part of its base expenditure, going forward.
The company clarified that it is not factoring in any meaningful contribution from Leqselvi and Unloxcyt outside the US during FY27, as filings and approvals in international markets are expected to take time due to the need for adapting existing clinical data for different geographies.
Strategic Acquisitions and Future Outlook
Sun Pharma also highlighted the strategic rationale behind its recent acquisition of Organon, saying the transaction would complement its existing portfolio with minimal product overlap.
The management said the deal would add a biosimilars business and strengthen the company’s innovative portfolio through Organon’s women’s health franchise.
Combined innovative business contribution from both companies is expected to rise to nearly 26-27 per cent.
Sun Pharma said the acquisition complements its existing strengths in dermatology, ophthalmology and oncology, while also expanding its branded generics business globally.
