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We met Jayashree Satagopan, the CFO of Sun Pharma, as part of her first fullfledged interaction with analysts. KTAs: 1) Sun sees no impact of MFN on the specialty portfolio; impact will be limited to Medicaid exposure, which is anyway low for most specialty products (in our view, this is also backed by the Medicare + Medicaid spend data for Sun’s brands). 2) Payor coverage discussions for Leqselvi have exceeded internal expectations; Abbvie’s Rinvoq has thrombosislinked adverse events, which doctors will be cognizant of. 3) See no slowdown in domestic growth in acute; outperformance vs IPM has been broad-based across markets, and Sun will continue to gain share in top therapies. 4) Sun intends to be in the market on Day 1 in Semaglutide, in India; will be a key player in all markets that matter (including Canada and Brazil). 5) Sun prefers late-stage assets for acquisitions, though it is not ruling out early-stage investments. Net-net, we could not draw anything incrementally negative enough for us to review our positive stance on the name. We reiterate BUY.

MFN impact on specialty likely to be limited; wait-and-watch mode on US tariffs

While Sun sees no impact of MFN on its US specialty portfolio, the company remains in a wait-and-watch mode with respect to US tariffs, given that the outcome of the Section 232 investigation of pharma imports is awaited (per the company, transferring IP to the US will not help circumvent tariffs). Sun has no plans to increase its manufacturing footprint in the US, though it will look to manufacture more products in its existing US facilities. The company is achieving parity in terms of payor coverage for Leqselvi on Day-1 vs existing players. The USD100mn spend on specialty being incurred in FY26 will not be entirely recurring (hiring + launch-related costs being incurred upfront; Unloxcyt will be launched in 4QFY26). While Sun has given a detailed response to the FDA’s observations issued to its Halol facility, the company has been transferring products from Halol to its Baska facility to the extent possible.

Outperformance vs IPM broad-based across markets; share gains to sustain

Sun has not witnessed any slowdown in its acute portfolio which is also a function of the nature of its acute mix – for instance, limited presence in fever, a pain portfolio largely focused on osteoarthritis, recent acquisitions in niche spaces such as wound management. Sun has not seen a major variation in terms of performance across town classes, even as the proportion of MRs added in markets beyond Tier 1 might be small. However, Sun has benefited from penetration gains in Tier 2 markets with a meaningful specialist presence. The company will continue to focus on share gains in therapy areas where it is the market leader, and sees further scope for improvement in MR productivity. Pricing across categories is at the median and is not higher vs peers. Sun does not see the need to expand its domestic manufacturing capacity, with incremental investments likely to be directed toward manpower and customer engagement.

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