Sun Pharma beats Street—Q2 net profit up 2.6%, US sales down 4%

Sun Pharmaceutical Industries on Wednesday beat Street estimates for the September quarter with a consolidated net profit of ₹3,117.95 crore, up 2.6% from ₹3,040.16 crore reported in the year-ago period. India's largest drugmaker by sales said its revenue from operations rose 8.6% year-on-year (y-o-y) to ₹14,405.2 crore.

The company witnessed steady revenue growth in most markets. Its generic sales in the US saw a decline during the reporting quarter, but this was offset by growth in the company's innovative portfolio, Sun Pharmaceutical said.

A Bloomberg poll had pegged the drugmaker’s revenue to grow to ₹14,244 crore with profit after tax at ₹2,881 crore for the quarter.

The pharmaceutical company's earnings before interest, taxes, depreciation, and amortization (Ebitda) for the quarter was ₹4,527 crore, up 14.9%, while the margin was 31.3%, up from 29.6% a year ago.

“US sales of innovative medicines have surpassed generics for the first time during the quarter,” Kirti Ganorkar, managing director of Sun Pharma, said in a company release.

“Growth in innovative medicines was led by Illumya, Cequa and Odomzo,” Richard Ascroft, North America chief executive officer, told investors in a post-earnings call, adding that the generics business saw lower sales on account of stiffer competition in certain products and lower sales of lenalidomide (Revlimid).

Sun Pharma’s US generic sales were at $496 million for the quarter, registering a decline of 4.1%. US sales accounted for approximately 30.1% of total consolidated sales, the company said.

Its innovative medicine sales were at $333 million for Q2, up 16.4% y-o-y, and accounted for 20.2% of the total consolidated sales.

Given its innovative drug portfolio, Sun Pharma could likely be hit by US import tariffs on pharmaceuticals. However, the company said it was still awaiting clarity. “We don't have any additional tariffs that we're paying today. The original announcement has been put on pause, and we're still awaiting the outcome of the section 232 investigation,” said Ascroft, referring to the investigation launched by the US government earlier in April into imports of pharmaceuticals.

Ashcroft said Sun Pharmaceutical “is open to considering” expanding its manufacturing footprint in the US.

India sales

The company’s domestic sales grew 11% y-o-y to ₹4,734.8 crore. India formulation sales accounted for 32.9% of the total consolidated sales.

Sun Pharmaceutical retained its top position by sales, and its domestic market share increased marginally from 8% to 8.3%, the company said. It launched nine new products during the quarter and 15 products year to date.

Sun Pharma is gearing up to be among the first Indian companies to launch weight loss drug semaglutide in India, as it goes off patent in March. “I can tell you broadly that the GLP-1 (glucagon-like peptide) market is very exciting and it will continue to grow,” said chairman Dilip Shanghvi. “We want to participate in the market whenever the first opportunities are available.”

Shanghvi declined to commit whether the company would launch both injectable and oral versions of the drug, but said “we will remain competitive. If others launch, we'll also launch along with them”.

Innovative portfolio

During the quarter, Sun Pharma launched Leqselvi in the US for the treatment of severe alopecia areata. The drug has received encouraging response from prescribers and patients.

Its innovative R&D pipeline has six novel entities in the clinical stage. These include cancer drug Unloxcyt, which has been approved in the US.

In the fourth quarter of FY25, Sun Pharma had announced it would invest $100 million in FY26 for the launch and commercialisation of its new specialty product pipeline in the US.

Sun Pharma is also working on its own GLP-1 drug candidate, GL0034. The drug, indicated for type-2 diabetes has completed phase 1 trials and phase 2 clinical trials are expected to start in the second half of this year.

“We are quite excited with the early data that we are getting with patients, both for MASH (metabolic dysfunction-associated steatohepatitis, or fatty liver disease) as well as for diabetes. And we would be presenting this data shortly,” said Shanghvi.