Weak guidance may hit Sun Pharma in FY26

Brokerages cut earnings estimates by 4-8% for pharma major

- RAM PRASAD SAHU

Despite a healthy performance in the fourth quarter of 2024-25 (Q4FY25), the stock of India's largest listed pharma company, Sun Pharmaceutical Industries (Sun Pharma), was under pressure on Friday due to a muted guidance.

The company has guided for a high single-digit revenue growth for FY26, which is below what the Street was working with. This coupled with higher expenses related to the launch of specialty products in the US market has prompted brokerages to cut their earnings estimates for FY26 by 4-8 per cent. The stock was the only loser in the Sensex, shedding 2 per cent, while the benchmark was up about 1 per cent in trade.

The Q4 show was broadly in line with the Street estimates. Revenues grew 8 per cent year-on-year (Y-o-Y) to just under ₹13,000 crore, with growth coming largely from the domestic formulation space that registered a growth of 14 per cent Y-o-Y.

US generic and global specialty sales growth was lower. Specialty sales growth at 9 per cent was moderate and came after multiple quarters of double-digit growth.