Concerns may be overdone for Sun Pharma stock

In Q1FY26, concerns for the pharma industry revolved around jitters about the US.

- DEVANGSHU DATTA

This came even as the India business growth of major players was steady at 9.7 per cent year-on-year (Y-o-Y), led by price hikes and better volumes. The dip in the US was on account of pricing pressure in Revlimid and also fears about future tariff imposts.

Companies are, however, confident they can pass on cost escalation in case of US tariff on generics to customers.

Among the top corporates, Sun Pharma grew the fastest in Aug-2025 with 13.7 per cent Y-o-Y growth in the domestic market. Sun Pharma has been consistently outpacing the domestic market. However, there have been concerns about the sustainability of Sun's domestic performance and also concerns around Sun's specialty investments in FY26 and its new specialty launches.

Notably, while domestic formulations are one-third of the overall top line, the business accounts for 55 per cent of Sun's overall earnings before interest, taxes, depreciation and amortisation (Ebitda), which may see double-digit growth.

The company's revenue mix has changed over FY20-25 with branded sales share at 70 per cent in FY25 versus 56 per cent in FY20 and expected to hit 76 per cent by FY28.