Buy Sun Pharmaceutical Industries Ltd for the Target Rs.2,300 by Choice Institutional Equities
Key Conference Call Highlights
US Business
* US business revenue declined marginally in Q4FY26 as growth in innovative medicine was offset by increased competition in the generics portfolio.
* Innovative medicine, driven by strong traction in Ilumya, Cequa, Odomzo and Winlevi, crossed USD 1.1 Bn revenue in the US for the first time in FY26.
* Leqselvi has achieved majority access in the US market as of April 2026, supporting growth momentum.
* The management highlighted a positive early response for Unloxcyt, with physicians appreciating its efficacy-tolerability balance and lower immune-mediated adverse events.
* Winlevi is showing strong prescription traction following a strategy change and Cequa continues to deliver consistent growth.
India Business
* Sun Pharma retained its leadership position, increasing its India market share to 8.4%, marking the highest gain since the Ranbaxy acquisition.
* Growth in India continued to be volume-led and driven by new product launches
* Launched Semaglutide injections under the brands Noveltreat and Sematrinity across all strengths in the quarter.
Emerging Markets Business
* Ilumya continued to perform strongly across markets, such as Romania, Brazil and China, becoming a key growth driver outside the US.
* The management indicated that innovative medicines are increasingly complementing the traditional branded generics business in emerging markets
* The company sees Semaglutide as a potential long-term growth opportunity across emerging markets.
Outlook
* The management guided for high single-digit consolidated revenue growth in FY27 based on the current macro and regulatory environment.
* R&D spend for FY27 is guided at 6%–7% of sales, with the innovative R&D share expected to increase as pipeline products grow.
* Organon acquisition integration activities have commenced, with transaction closure expected by Q4FY27.
* Effective tax rate for FY27 is projected to be approximately 25%.
* The management anticipates only a marginal impact from proposed US tariffs on branded innovative drugs and is evaluating mitigation strategies.
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