Sun Pharma Q2 FY26 Earnings Rise 8% Amid US Sales Dip; India & RoW Drive Growth

Sun Pharmaceutical Industries Ltd. announced its consolidated financial results for the second quarter of FY26, reporting an EBITDA of ₹4,100 crore, an 8% increase compared to the same period last year. This growth was somewhat constrained by a decline in sales from the United States market and an increase in raw material costs. Consequently, the EBITDA growth for the first half of FY26 stood at 9.4%, which is lower than the 14.7% recorded in FY25.

Total revenue for the quarter increased by 9% to ₹14,500 crore. The company's performance was significantly supported by its India business, which grew by 11% and accounts for 33% of total revenue. Furthermore, the Rest of World (RoW) and Emerging Markets (EM) regions showed robust expansion, with growth rates of 23% and 16% respectively. These markets now collectively contribute 34% of Sun Pharma's total revenue, an increase of 300 basis points from the previous year.

The US market, a key region contributing 30% to Q2 revenue, experienced a 4% decline in dollar terms. This was attributed to rising competition in several important products and potential policy uncertainties, including the threat of tariffs, although some have been put on hold. Sun Pharma's management has stated they are open to expanding their manufacturing presence within the US.

The company's strategic focus on its innovative or specialty products business has shown strong results, with this segment growing by 21% in Q2. This growth rate far exceeds the 6.2% growth in the rest of its portfolio. The specialty segment now represents 20% of total sales and accounts for a significant 38% of the company's overall R&D expenses. Analysts predict this specialty portfolio could achieve a Compound Annual Growth Rate (CAGR) of approximately 20% from FY25 to FY28.

Sun Pharma launched nine new products during the quarter, including Leqselvi in the US for alopecia areata. However, competition is expected to intensify, with other companies also filing applications in similar categories. The company plans future launches such as Unloxcyt and Ilumya, with a pipeline of 117 Abbreviated New Drug Applications (ANDAs) awaiting US Food and Drug Administration approval.

Impact This news is impactful for Sun Pharmaceutical Industries Ltd. and the broader Indian pharmaceutical sector. The challenges in the US market, including competition and policy risks, require careful navigation. However, the strong diversification achieved through growth in India and emerging markets, coupled with the promising specialty product pipeline, provides resilience. The stock's future trajectory will likely depend on clarity regarding US market policies and the company's execution of its growth strategies. Impact Rating: 7/10

Heading: Difficult Terms Explained * **EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)**: A financial metric representing a company's operating performance before accounting for financing costs, taxes, and non-cash charges like depreciation and amortization. * **Forex Translation**: The process of converting financial data denominated in foreign currencies into the company's reporting currency. Fluctuations in exchange rates can affect reported results. * **CAGR (Compound Annual Growth Rate)**: The mean annual growth rate of an investment over a specified period longer than one year. * **RoW (Rest of World)**: Refers to all geographic regions outside of a company's primary or home markets. * **EM (Emerging Markets)**: Countries that are progressing toward becoming advanced economies, often characterized by rapid industrialization and economic growth. * **US FDA (United States Food and Drug Administration)**: The federal agency responsible for protecting public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices. * **ANDAs (Abbreviated New Drug Applications)**: A type of drug application submitted to the US FDA for approval of a generic drug. * **Alopecia Areata**: An autoimmune disease that causes hair loss in patches. * **Plaque Psoriasis**: A common skin condition that causes red, itchy, scaly patches on the skin.