Sun Pharma’s specialty portfolio, Organon deal to drive growth

ET Intelligence Group: Sun Pharmaceutical delivered strong double-digit revenue growth in the September quarter, supported by robust performance in India, emerging markets and its specialty medicines portfolio. Its profitability was weighed down by one-off acquisition-related and litigation settlement costs. The company’s medium-term growth outlook will be driven by specialty therapies such as Ilumya, Unloxcyt and Leqselvi. New specialty launches, expansion in cardiovascular therapies through Lerodalcibep, progress in late-stage clinical assets and continued market share gains in India are expected to offset pressure on the US generics business.

The company’s domestic market share rose to 8.6% in the September 2026 quarter from 8.3% a year earlier. A key focus area remains the innovative medicines portfolio, which contributes more than one-fifth to the company’s overall sales. While growth in Ilumya moderated during the quarter, Sun attributed this partly to execution-related factors and expects momentum to improve following the recent approval of the drug for psoriatic arthritis in the US.

Sun is also advancing the innovation pipeline, with late-stage assets such as Fibromun and Nidlegy nearing key milestones, while diabetes candidate GL0034 remains under development. The company expects R&D investments to increase in the second half of FY27 as development activities accelerate. R&D spending was 4.8% of sales during the quarter compared with 5.4% in the year ago quarter.

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Another significant growth driver is the proposed Organon acquisition, which is expected to be completed by the fourth quarter of FY27, subject to approvals. The transaction is likely to expand Sun’s global footprint and strengthen its specialty and biosimilar capabilities.

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Choice Equity Broking has retained a ‘BUY’ rating on the stock with a target price of ₹2,300, a 29.3% upside to Friday’s closing price of ₹1,778.3, citing the company’s specialty portfolio, innovation pipeline and proposed Organon acquisition as key growth drivers. However, it has lowered the FY27-28 earnings estimates by 1-3.6% amid weakness in the US business.