Sun Pharma misses Q1 estimates as US generics drag offsets India growth
Sun Pharmaceutical Industries, India's largest drugmaker market capitalization, missed Street expectations in the June quarter as weakness in its US generics business weighed on profitability
Sun Pharmaceutical Industries, India's largest drugmaker market capitalization, missed Street expectations in the June quarter as weakness in its US generics business weighed on profitability despite double-digit revenue growth and continued strength in its India and innovative medicines businesses. The company reported consolidated revenue of ₹15,299 crore for the June quarter, up 10.5% year-on-year, while net profit rose 27% to ₹2,895 crore. Strong growth in the domestic business and innovative medicines offset a decline in US generics sales but was not enough to meet analyst estimates. A Bloomberg poll had pegged revenue at ₹15,527 crore and net profit at ₹2,974 crore. Quick answers to key questions • 5 QUESTIONS 1 Why did Sun Pharma miss Q1 estimates despite revenue growth? ⌵ Sun Pharma missed Q1 estimates primarily due to weakness in its US generics business, which affected overall profitability, even as it reported strong double-digit growth in its India and innovative medicines divisions. 2 How did Sun Pharma's performance in the domestic market compare to its US business?
⌵ Sun Pharma's domestic business saw a 16% year-on-year growth, contributing 36% of overall revenue, while its US generics sales fell 9.7% year-on-year due to pricing pressure and increased competition. 3 What role do innovative medicines play in Sun Pharma's strategy? ⌵ Innovative medicines are central to Sun Pharma's strategy, significantly driving growth, particularly in the US and emerging markets, where they recently reported a 12.8% year-on-year sales increase. 4 How is the US generics market impacting Sun Pharma's profitability? ⌵ The US generics market is impacting Sun Pharma's profitability by introducing pricing pressures and intensifying competition, leading to a decline in generic sales that counteracts the company's otherwise strong performance. 5 What factors contributed to Sun Pharma's overall revenue growth in Q1? ⌵ Sun Pharma's overall revenue growth in Q1 can be attributed to strong performance in its domestic market and growth from innovative medicines, which helped offset the decline in US generics sales. Adjusted net profit rose 3.1% to ₹3,089 crore.
Ebitda increased 2.7% to ₹4,417 crore, while the Ebitda margin narrowed to 28.9% from 31.1% a year earlier. “Our performance during the quarter was driven by strong momentum in India as well as Innovative Medicines, which delivered robust growth across the U.S. and international regions,” managing director Kirti Ganorkar said in a statement. Shares of the company closed 0.7% lower at ₹1,987 apiece on the Stock Exchange on Friday. India, innovative drugs cushion US weakness Global innovative medicines sales rose 12.8% year-on-year to $351 million, accounting for 21.9% of total sales. In its investor presentation, the company saidthe innovative portfolio remains central to its strategy and continued to drive growth in both the US and emerging markets during the quarter. India remained Sun Pharma's largest market, contributing 36% of overall revenue. Sales in the domestic business climbed 16% year-on-year to ₹5,475 crore, outpacing the broader Indian pharmaceutical market, which grew 12% during April-May 2026. The US business, however, remained under pressure. Sales fell 9.7% year-on-year to $427 million as pricing pressure and rising competition eroded generic drug sales.
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