Sun Pharma
Sun Pharma
Healthcare F&OKey Fundamentals
LargecapPharmaceuticalsHealthcareTapetide Score
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Key Insights
Strengths
2- Company is almost debt free.
- Company has been maintaining a healthy dividend payout of 34.1%
Weaknesses
1- The company has delivered a poor sales growth of 11.8% over past five years.
Growth Rate
AI Analysis — Bull vs Bear
Sun Pharmaceutical Industries is India's largest pharmaceutical company by market capitalisation at about Rs 4,43,853 crore. It trades at a P/E of 36.7x and a P/B of 5.32x, with 16% ROE sustained over 3 and 5 years and a nearly debt-free balance sheet. Sales have compounded at 12% over 5 years and 11% TTM, and profit at 17% over 5 years and 10% TTM. The global innovative medicines business has grown to 21.9% of sales (US$351 million in Q1FY27, up 12.8%), while overall growth has moderated to high single digits in recent quarters.
- The balance sheet is almost debt free. This leaves room to fund specialty in-licensing, acquisitions and R&D without diluting shareholders or taking on much financial risk. It also supports a steady 34.1% dividend payout.
- The global innovative (specialty) medicines business reached US$351 million in Q1FY27, up 12.8% YoY and 21.9% of total sales. In the US, innovative medicine sales passed generics for the first time in Q2FY26, a shift toward a higher-margin, less commoditised mix.
- Profit has grown faster than sales. 5-year compounded profit growth of 17% compares with 12% sales growth, and FY25 EBITDA rose 17.3% and adjusted net profit 19.0% on 9.0% gross sales growth, which points to operating leverage and a better mix.
- India formulations, the largest domestic franchise, grew 13.6% YoY to Rs 4,213 crore in Q4FY25. This branded generics base in a structurally growing market has been beating overall company growth.
- Return ratios are steady. ROE has held at 16% over the last year, 3 years and 5 years, up from a 10-year average of 14%, which suggests capital efficiency is holding up as the business scales.
- The stock has compounded at 19% over 5 years and 18% over 3 years, roughly in line with or ahead of 17% 5-year profit CAGR. Returns have been largely earnings-driven, not purely from re-rating.
- Quarterly profits are growing at double digits. Q3FY26 net profit was Rs 3,369 crore, up 16.0% YoY, and quarterly revenue from operations has risen to about Rs 15,184 crore in Q1FY27.
- Valuation is demanding. At 36.7x earnings against 10% TTM profit growth, the implied PEG is about 3.7, and the P/B of 5.32x against 16% ROE leaves little room for execution misses.
- Growth is slowing. TTM sales growth of 11% and profit growth of 10% trail the 5-year profit CAGR of 17%, and quarterly sales growth has run in the 8.5-8.6% range (Q4FY25, Q2FY26).
- Long-term growth is modest. 10-year compounded sales growth is only 7% and profit growth 10%, and 5-year sales growth of 11.8% is flagged as weak for a company at this valuation.
- Over 10 years the stock has compounded at only 9%, well below its 3- and 5-year returns of 18-19%. Recent outperformance has come partly from a valuation re-rating that may not repeat.
- The dividend yield is low at 0.86% despite a 34.1% payout. At the current P/E, dividends add little to total return, which then depends mostly on continued earnings growth.
- The specialty franchise now makes up 21.9% of sales, which concentrates the company in the US. That raises exposure to US drug-pricing reforms, possible US pharma tariffs, and patent and competitive risk on key specialty brands.
- Sun has a history of US FDA compliance issues at some of its manufacturing sites. With US generics and specialty a large share of the roughly Rs 15,000+ crore quarterly revenue base, new regulatory action could disrupt supply and delay approvals.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- Global rights for PCSK9 inhibitor Sep 28
Sun Pharma signed an exclusive licensing deal with LIB Therapeutics for lerodalcibep covering all markets outside the US and China. The deal targets a $3.7 billion market.
- FY26 revenue up 12% Sep 22
FY26 revenue rose 12% YoY to ₹58,220 crore and EBITDA margin expanded to 30.3%. Net profit grew 5% YoY to ₹11,479 crore.
- Promoter reclassification approved Sep 26
On September 26, shareholders approved moving specific persons from the Promoter Group to the Public category under SEBI regulations. This is a procedural change with no direct impact on operations.
- FY26 ESG overview released Sep 29
The ESG overview reports a 15.86% reduction in carbon emissions and 17.97% female workforce representation.
- UBS, JPMorgan investor meetings added Sep 3
Two in-person meetings on Sep 21 and 22 (UBS India Summit, J.P. Morgan India Conference) were added to the existing Sep 10, 16 and 17 sessions in Mumbai and Delhi, for five in total. The company confirmed no UPSI will be disclosed.
TL;DR: Sun Pharma's FY26 showed solid growth, with revenue up 12% to ₹58,220 crore and EBITDA margin at 30.3%. The lerodalcibep licensing deal gives it a new specialty product with a $3.7 billion addressable market. One thing to watch is that net profit grew only 5%, much slower than revenue, which suggests costs below EBITDA are rising. None of the articles flagged a direct headwind. The trend looks steady to improving, and the stock's next leg likely depends on how fast lerodalcibep is commercialised and whether profit growth catches up with revenue.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 11,941 | 12,192 | 12,381 | 11,983 | 12,653 | 13,291 | 13,675 | 12,959 | 13,851 | 14,478 | 15,521 | 14,612 | 15,300 |
| Expenses | 8,609 | 9,013 | 8,904 | 8,948 | 9,045 | 9,352 | 9,666 | 9,243 | 9,550 | 9,951 | 10,572 | 10,658 | 10,882 |
| Operating Profit | 3,332 | 3,179 | 3,477 | 3,035 | 3,608 | 3,939 | 4,009 | 3,716 | 4,302 | 4,527 | 4,948 | 3,954 | 4,418 |
| OPM % | 28% | 26% | 28% | 25% | 29% | 30% | 29% | 29% | 31% | 31% | 32% | 27% | 29% |
| Other Income | -118 | 294 | 180 | 504 | 533 | 354 | 149 | 251 | -354 | 470 | 89 | 458 | 520 |
| Interest | 81 | 49 | 35 | 74 | 62 | 69 | 52 | 49 | 75 | 100 | 78 | 86 | 100 |
| Depreciation | 651 | 633 | 622 | 650 | 655 | 626 | 631 | 664 | 701 | 730 | 732 | 775 | 739 |
| PBT | 2,481 | 2,791 | 3,000 | 2,816 | 3,424 | 3,598 | 3,476 | 3,254 | 3,173 | 4,168 | 4,227 | 3,551 | 4,099 |
| Tax % | 19% | 14% | 14% | 5% | 16% | 16% | 16% | 34% | 27% | 25% | 20% | 23% | 29% |
| Net Profit | 2,006 | 2,385 | 2,561 | 2,659 | 2,861 | 3,037 | 2,913 | 2,154 | 2,293 | 3,125 | 3,381 | 2,710 | 2,901 |
| EPS in Rs | 8.43 | 9.9 | 10.52 | 11.06 | 11.82 | 12.67 | 12.1 | 8.96 | 9.5 | 13 | 14.04 | 11.31 | 12.06 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 27,392 | 28,487 | 31,578 | 26,489 | 29,066 | 32,838 | 33,498 | 38,654 | 43,886 | 48,497 | 52,578 | 58,462 | 59,911 |
| Expenses | 19,498 | 20,313 | 21,476 | 20,858 | 22,689 | 25,855 | 25,028 | 28,397 | 32,235 | 35,479 | 37,464 | 41,961 | 42,063 |
| Operating Profit | 7,894 | 8,174 | 10,102 | 5,631 | 6,377 | 6,983 | 8,470 | 10,258 | 11,650 | 13,018 | 15,114 | 16,501 | 17,847 |
| OPM % | 29% | 29% | 32% | 21% | 22% | 21% | 25% | 27% | 27% | 27% | 29% | 28% | 30% |
| Other Income | 283 | -42 | 610 | -135 | -258 | 382 | -3,449 | -3,505 | 459 | 865 | 1,444 | 1,895 | 1,537 |
| Interest | 579 | 523 | 400 | 518 | 555 | 303 | 141 | 127 | 172 | 238 | 231 | 339 | 364 |
| Depreciation | 1,195 | 1,038 | 1,265 | 1,500 | 1,753 | 2,053 | 2,080 | 2,144 | 2,529 | 2,557 | 2,575 | 2,938 | 2,976 |
| PBT | 6,403 | 6,571 | 9,048 | 3,479 | 3,810 | 5,010 | 2,799 | 4,481 | 9,408 | 11,088 | 13,752 | 15,119 | 16,045 |
| Tax % | 14% | 14% | 13% | 26% | 16% | 16% | 18% | 24% | 9% | 13% | 20% | 24% | — |
| Net Profit | 5,476 | 5,658 | 7,846 | 2,542 | 3,208 | 4,172 | 2,272 | 3,389 | 8,513 | 9,610 | 10,965 | 11,509 | 12,117 |
| EPS in Rs | 21.92 | 18.89 | 29.03 | 8.73 | 11.11 | 15.69 | 12.1 | 13.64 | 35.32 | 39.91 | 45.55 | 47.84 | 50.41 |
| Div. Payout % | 14% | 5% | 12% | 23% | 25% | 25% | 62% | 73% | 33% | 34% | 35% | 33% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 207 | 241 | 240 | 240 | 240 | 240 | 240 | 240 | 240 | 240 | 240 | 240 |
| Reserves | 25,431 | 32,742 | 36,400 | 38,074 | 41,169 | 45,025 | 46,223 | 47,771 | 55,755 | 63,427 | 71,978 | 83,330 |
| Borrowings | 8,996 | 8,497 | 9,832 | 10,385 | 10,514 | 8,315 | 3,869 | 1,290 | 6,886 | 3,274 | 2,362 | 4,627 |
| Other Liabilities | 14,089 | 13,948 | 14,624 | 15,598 | 12,666 | 14,615 | 17,291 | 20,474 | 17,831 | 18,387 | 17,328 | 20,210 |
| Total Liabilities | 48,723 | 55,428 | 61,095 | 64,297 | 64,590 | 68,194 | 67,622 | 69,776 | 80,712 | 85,328 | 91,908 | 1,08,407 |
| Fixed Assets | 12,682 | 15,872 | 17,675 | 18,853 | 21,837 | 22,847 | 21,553 | 22,665 | 24,065 | 23,248 | 22,586 | 32,822 |
| CWIP | 2,039 | 2,175 | 2,801 | 2,465 | 1,411 | 1,220 | 1,567 | 1,287 | 4,973 | 5,354 | 6,644 | 3,052 |
| Investments | 2,716 | 1,830 | 1,192 | 7,143 | 7,903 | 10,143 | 9,612 | 12,849 | 14,824 | 15,026 | 18,354 | 24,723 |
| Other Assets | 31,286 | 35,550 | 39,427 | 35,837 | 33,439 | 33,984 | 34,890 | 32,975 | 36,849 | 41,700 | 44,324 | 47,811 |
| Total Assets | 48,723 | 55,428 | 61,095 | 64,297 | 64,590 | 68,194 | 67,622 | 69,776 | 80,712 | 85,328 | 91,908 | 1,08,407 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 5,616 | 6,686 | 7,082 | 3,907 | 2,196 | 6,555 | 6,170 | 8,985 | 4,959 | 12,135 | 14,072 | 12,419 |
| Investing | -1,502 | -3,949 | -4,186 | -3,104 | -310 | -2,225 | 407 | -5,556 | -7,220 | -763 | -5,183 | -10,405 |
| Financing | -1,187 | -1,889 | -2,285 | -1,539 | -2,731 | -5,715 | -5,980 | -5,193 | 2,376 | -6,710 | -7,906 | -2,513 |
| Net Cash Flow | 2,927 | 848 | 611 | -736 | -844 | -1,386 | 596 | -1,765 | 115 | 4,662 | 983 | -498 |
| Free Cash Flow | 3,316 | 3,353 | 3,492 | 2,013 | -966 | 5,105 | 5,097 | 7,550 | 2,895 | 9,964 | 12,005 | 8,906 |
| CFO/OP | 93 | 106 | 90 | 83 | 48 | 113 | 85 | 78 | 56 | 105 | 96 | 89 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 68 | 87 | 83 | 108 | 112 | 105 | 99 | 99 | 95 | 85 | 91 | 97 |
| Inventory Days | 307 | 370 | 307 | 338 | 366 | 311 | 378 | 315 | 360 | 338 | 348 | 363 |
| Days Payable | 178 | 207 | 197 | 234 | 192 | 142 | 167 | 158 | 194 | 194 | 210 | 232 |
| Cash Conversion Cycle | 197 | 251 | 193 | 212 | 285 | 274 | 310 | 255 | 261 | 229 | 228 | 228 |
| Working Capital Days | -7 | 37 | -4 | -31 | 31 | 51 | 51 | 47 | 40 | 55 | 65 | 54 |
| ROCE % | 23% | 18% | 20% | 10% | 10% | 10% | 13% | 17% | 16% | 17% | 20% | 21% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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70 extracted metrics + investor summaries across FY07–FY27.
Documents
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Company Information
Sun Pharmaceutical Industries Ltd is engaged in the business of manufacturing, developing and marketing a wide range of branded and generic formulations and Active Pharma Ingredients (APIs). The company and its subsidiaries has various manufacturing facilities spread across the world with trading and other incidental and related activities extending to global market.[1] It is the largest pharmaceutical company in India.[2]
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