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 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.

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. Management said on the post-earnings investor call that the year-on-year decline in margin reflected a high base, as the year-ago quarter had benefited from stronger sales of blood cancer drug lenalidomide in the U.S.

“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 National 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 said the 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.

Growth from innovative medicines, including psoriasis treatment Ilumya, skin cancer drug Odomzo and chronic dry eye therapy Cequa, partly offset the decline. Generic products, including blood cancer drug lenalidomide, continued to weaken because of intensifying competition and pricing pressure.

“Recent semaglutide approvals in India, Brazil and South Africa underscore our capabilities in developing complex peptide products for patients globally,” Ganorkar said.

Sun Pharma holds the second-largest share of India's semaglutide market, Ganorkar told investors. The company has already commercialized the drug in South Africa after receiving approval last week and plans to launch it in Brazil following regulatory approval earlier this week.

“We are well prepared for the launches,” Ganorkar said, adding that the company has secured its supply chain to meet expected demand through in-house API manufacturing, formulation capabilities and partnerships with device manufacturers.

The company also said the acquisition of Organon, announced in April at an enterprise value of $11.75 billion, received shareholder approval on 23 July and is expected to close in the fourth quarter of the current fiscal year (FY27).

The emerging markets business, which includes countries like Romania, Brazil, South Africa and Mexico, recorded revenue of $311 million, 4.2% higher than last year, driven by innovative drugs. The business accounted for 19.4% of overall sales for the quarter.

Meanwhile growth remained flat in the rest of world (RoW) markets, including Western Europe, Canada, Japan, Australia and New Zealand, with revenue at $218 million.