The share price of Sun Pharmaceutical Industries is in focus today after the pharmaceutical sector stock reported its Q4FY26 earnings. While the company’s quarterly performance was not entirely flawless due to softer margins, brokerages largely remained constructive on the stock.
This is supported by continued strength in its branded formulations business and sustained momentum in specialty products. Revenue stayed firm across India and international markets, while elevated spending and lower milestone income held back profitability.
Motilal Oswal on Sun Pharmaceutical Industries: Buy’
Motilal Oswal retained its ‘Buy’ recommendation and assigned a target price of Rs 2,120, implying upside of about 15%. The brokerage said the quarter’s operational showing came under pressure because of higher marketing costs and lower milestone income, yet it did not alter its broader earnings view on the business.
According to Motilal Oswal report, Sun Pharma delivered revenue broadly in line with expectations in Q4FY26, while earnings before interest, tax, depreciation and amortisation (EBITDA) and adjusted profit after tax (PAT) missed estimates because of elevated operating expenditure.
Revenue rose to Rs 14,559.8 crore in Q4FY26 from Rs 12,815.6 crore in Q4FY25, while adjusted profit after tax fell to Rs 2,386.8 crore from Rs 2,889.1 crore over the same period. The brokerage also reduced earnings estimates for FY27 and FY28 after building in higher promotional spending and a slower recovery in United States generics.
Motilal Oswal said innovative medicines continued to provide the strongest support. The segment posted 20% year-on-year growth in Q4FY26 and 16.5% growth for FY26 while contributing nearly 22% of quarterly sales. The firm also pointed to Sun Pharma’s sustained gains in domestic formulations where product launches and market share expansion continued to support growth.
The brokerage added that branded generics execution remained strong enough to offset some pressure coming from continued pricing pressure in United States generics.
Nuvama on Sun Pharmaceutical Industries: ‘Buy’
Nuvama Institutional Equities maintained a ‘Buy’ rating and raised its target price to Rs 2,115. This translates to an upside potential of nearly 15%.
Nuvama described the quarter as operationally softer than expected but argued that underlying business momentum remained intact. Revenue increased to around Rs 14,611.8 crore in Q4FY26 from Rs 12,958.8 crore a year earlier, supported by domestic formulations, innovative products and emerging markets. Adjusted profit came in at Rs 2,714 crore against Rs 2,511.6 crore in Q4FY25.
The brokerage noted that adjusted EBITDA margins remained below consensus expectations because of additional spending during the quarter and higher research and development investment. Research spending increased to Rs 970 crore and represented 6.7% of sales.
Nuvama continued to favour the company’s position in India and specialty medicines. It said innovative products such as Ilumya, Unloxcyt and Leqselvi could continue to support growth while the domestic business may benefit from the company’s glucagon-like peptide one portfolio. The report also viewed the proposed Organon acquisition as an additional source of value over time.
The brokerage said management’s guidance for high single-digit growth in FY27 was broadly aligned with expectations and expected some of the quarter’s cost pressure to ease.
JM Financial on Sun Pharmaceutical Industries: ‘Add’
JM Financial Institutional Securities took a more measured position and downgraded the stock to ‘Add’ from ‘Buy’ while increasing its target price marginally to Rs 2,011. That implied an upside of around 9%.
The brokerage acknowledged the strength of Sun Pharma’s operating platform but argued that recent stock performance had reduced room for re-rating in the near term. Revenue increased to Rs 14,559.8 crore in Q4FY26 from Rs 12,815.6 crore in Q4FY25, while adjusted profit rose to Rs 2,714.1 crore from Rs 2,441 crore during the same period. EBITDA margin contracted because of lower milestone income, softer contribution from lenalidomide and spending in selected markets.
JM Financial said global innovative medicines remained the standout contributor. Segment revenue rose 20.1% year on year to $354 million in the quarter, supported by Ilumya, Cequa and Winlevi. Domestic formulations also remained strong with India sales increasing to Rs 4,840 crore in Q4FY26 from the year-ago period on volume gains and new launches.
The brokerage noted that Sun Pharma expanded market share in India to 8.4% from 8.1% and launched 37 products during FY26. It also pointed to the company’s generic semaglutide launch and continued investment in the specialty portfolio.
At the same time, JM Financial said recent gains in the stock and near-term margin pressure linked to investment spending justified a more moderate recommendation.
Nomura on Sun Pharmaceutical Industries: ‘Buy’
Nomura maintained its ‘Buy’ rating and retained a December 2026 target price of Rs 1,920, translating into an upside of about 4%.
The brokerage said the quarter came with a mild margin disappointment but remained constructive on growth prospects. Revenue exceeded its estimate by 2% and specialty revenue reached $354 million against its estimate of $347 million. Profit after tax exceeded estimates because of stronger other income.
Nomura pointed to sustained traction in India and ex-United States markets and said innovative product sales had become larger than generic sales in the United States during FY26. Global innovative medicines revenue increased to $1.42 billion in FY26 from the previous year, supported by Ilumya, Odomzo, Cequa and Winlevi.
The brokerage also focused on the next leg of growth through the specialty business. Ilumya generated $796 million in FY26 and continued expanding internationally across nearly 40 countries. Nomura said regulatory review for psoriatic arthritis could broaden the product’s opportunity set.
The report further noted that the Organon transaction remained outside current valuation assumptions and could support earnings over time once completed.
Nomura also said the company expected research spending at 6% to 7% of sales in FY27 and guided for high single-digit revenue growth.
Conclusion
Brokerage commentary after Sun Pharma’s fourth-quarter results pointed in one direction even if conviction levels differed. Margin pressure and elevated spending attracted attention, yet most firms continued to place greater weight on specialty medicines, domestic formulations and the company’s growing innovation pipeline. The only downgrade in the set came from valuation discipline rather than concerns around business momentum. With target prices stretching up to Rs 2,120, brokerages broadly continued to see room for gains, though expectations for the next phase increasingly rested on execution rather than multiple expansion.
Disclaimer: The stock ratings, target prices, and operational projections discussed in this report are based on institutional research updates and do not constitute direct buy, sell, or hold recommendations for retail investors. Pharmaceutical and healthcare investments are subject to distinct regulatory oversight, clinical trial outcomes, and research and development spending pressures, which can cause margins and profit estimates to vary significantly. Readers are strongly advised to consult a SEBI-registered investment advisor or qualified financial professional before making specific equity or sector-specific allocation decisions.
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