**Sun Pharma’s Earnings Expected to Rise Amid Strong Domestic and Global Growth**
Sun Pharmaceutical Industries Ltd is poised for a boost in earnings for the June quarter, driven by an increase in its domestic business and significant growth in its global specialty sector. As India’s largest drugmaker, Sun Pharma has consistently achieved mid-to-high single-digit growth over the past eight quarters. Analysts from Nuvama and Kotak Securities project a year-on-year revenue increase of 7-8% for the first quarter.
The company is scheduled to release its financial results for the first quarter on Thursday, June 31. Its US generics segment is anticipated to experience a sequential sales increase of 3-5%, supported by a rise in specialty sales and higher revenues from the blood cancer medication Revlimid, which is set to lose exclusivity next year.
According to Kotak Securities, Sun Pharma’s global specialty business could see a 13% year-on-year growth, reaching $300 million in the first quarter, fueled by increased prescriptions for drugs such as Ilumya, Winlevi, Cequa, and Odomzo. Emkay Global estimates that Revlimid sales for the quarter will reach $33 million, up from $20 million in the previous quarter.
In a recent announcement, Sun Pharma revealed plans to invest $100 million in FY26 to launch and commercialize its new specialty product pipeline in the US. Chairman and Managing Director Dilip Shanghvi emphasized that this investment will significantly enhance the company’s specialty business for the future. While this one-time expense may impact the company’s earnings before interest, tax, depreciation, and amortization (EBITDA) margins, a reduction in research and development spending in the first quarter could lead to some margin improvement.
BNP Paribas analyst Tausif Shaikh noted that while Sun Pharma has projected $100 million in costs related to new specialty product launches, the EBITDA margin is expected to improve in the first quarter, although subsequent quarters may face pressure. Nuvama forecasts the EBITDA margin for the first quarter to be around 29%, with EBITDA growing by 10% year-on-year.
In the previous quarter, Sun Pharma reported an 8% year-on-year increase in total revenue from operations, amounting to ₹12,958.8 crore. EBITDA rose by 22.4% to ₹3,716 crore, with margins at 28.7%. However, net profit fell by 19% year-on-year to ₹2,154 crore due to exceptional items, including an impairment on an investment.
Looking ahead, Sun Pharma’s first-quarter sales are projected to grow by 10.5-12% year-on-year, following robust double-digit growth in domestic sales for seven consecutive quarters. However, growth in the US generics segment is expected to remain subdued in the near term due to plant-related issues and price erosion in its base business, as noted by HDFC Securities.
**FAQ**
*What factors are contributing to Sun Pharma’s expected earnings growth?*
Sun Pharma’s anticipated earnings growth is primarily driven by an uptick in its domestic business and strong performance in its global specialty sector, alongside increased sales of key products like Revlimid.
