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Innovation-led Expansion Positions SUNP among Global Pharma Leaders SUNP remains on track to emerge among the global pharma leaders, supported by increasing contribution from innovative products, entry into the biosimilars segment and higher China exposure through the Organon acquisition. We expect market share gains from specialty products including Unloxcyt, Ilumya, Cequa and Semaglutide, alongside volume growth, to support low double-digit revenue growth in the near term for the base business excluding Organon. We marginally revise FY27E earnings estimate downwards by 1.1% and continue to value the company at 25x FY28E EPS and maintain our TP to INR 2,300 with a BUY rating.

Strong Revenue Growth Offset by Margin Compression

*Revenue grew 12.8% YoY but declined 5.9% QoQ to INR 1,46,118 Mn (vs. CIE estimate: INR 1,40,164 Mn).

* EBITDA grew 6.4% YoY but declined 20.1% QoQ to INR 39,542 Mn; margin contracted 161 bps YoY / 482 bps QoQ to 27.1% (vs. CIE estimate: 31.6%).

* Adj PAT increased 13.6% YoY but declined 27.9% QoQ to INR 27,140 Mn.

Organon Acquisition and Specialty Pipeline to Drive Next Growth Phase

SUNP recently announced the acquisition of Organon, which is expected to not only double its revenue to INR 1,208 Bn in FY27E, but also strategically transform its portfolio mix through entry into the fast-growing biosimilars segment and higher contribution from innovative products. The management expects the transaction to close by Q4FY27. Additionally, base business growth is expected to be driven by:

* US: We expect high single-digit growth supported by increasing contribution from innovative products and continued strong traction in Ilumya, Uloxcyt and Leqselvi. Any tariff-related impact is likely to remain marginal. ? India: Volume-led growth trajectory is expected to continue, with IPM outperformance driven by launches including Semaglutide, launched in March 2026.

* EMs: The management expects the business mix to gradually evolve, from branded generics towards specialty and innovative therapies. Semaglutide could also emerge as a meaningful medium-term growth driver. The medium-term pipeline also remains promising, including oral Semaglutide, Ilumya label expansion, Leqselvi lifecycle expansion and Organonrelated pipeline opportunities.

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