India’s largest drugmaker, Sun Pharmaceutical Industries, on Friday reported a 36 per cent year-on-year decline in consolidated net profit to Rs 1,988.5 crore for the second quarter of FY27, weighed down by exceptional charges. Revenue from operations rose 11.9 per cent to Rs 16,198.7 crore.
The company reported exceptional charges of Rs 1,268.8 crore, comprising Rs 922.7 crore towards a settlement in a US antitrust litigation case and Rs 346.2 crore in expenses related to its proposed acquisition of Organon. Excluding exceptional items, adjusted net profit stood at Rs 3,162 crore, up 1.4 per cent year-on-year.
EBITDA rose 4.8 per cent to Rs 4,743.9 crore, with margins at 29.3 per cent.
The company said the margin was lower than a year earlier because the year-ago quarter had benefited from sales of generic lenalidomide, a product now facing erosion in the US. Gross margin improved to 80.8 per cent. The effective tax rate rose to 28.3 per cent from 24.7 per cent.
The results were announced during market hours. Sun Pharma shares rose 0.8 per cent to close at Rs 1,778.25 on the BSE.
“Our performance during the quarter was driven by strong momentum in India, Emerging Markets and Rest of World,” said Kirti Ganorkar, Managing Director. He highlighted the US approval of Ilumya for treating adults with active psoriatic arthritis and the preferred recommendation from the National Comprehensive Cancer Network (NCCN) for Unloxcyt in advanced cutaneous squamous cell carcinoma.
India leads growth
Formulation sales in India rose 17.3 per cent to Rs 5,552.3 crore, accounting for 34.5 per cent of consolidated sales. Sun Pharma’s market share increased to 8.6 per cent from 8.3 per cent, according to Pharmarack’s moving annual total (MAT) data for September 2026, retaining its position as the country’s largest pharmaceutical company. It ranked first by prescriptions in 12 doctor categories, according to SMSRC data.
The company launched 14 new products during the quarter and 19 in the first half of FY27.
US sales decline
US formulation sales fell 8.2 per cent to $455 million, accounting for about 27 per cent of total sales, hurt by erosion in generic lenalidomide sales. However, sales grew 6.5 per cent sequentially, supported by five generic launches.
On the earnings call, management also acknowledged a slowdown in Ilumya sales in the US. Richard Ashcroft, CEO of North America, said the causes were mixed. “I think there’s a bit of market, but frankly, part of it is execution as well, and that’s the intervention we’ve put in place,” he said.
The global innovative medicines business grew 6.9 per cent to $356 million. Emerging markets formulation sales rose 7.6 per cent to $350 million, while rest-of-the-world formulation sales increased 3.1 per cent to $241 million. External active pharmaceutical ingredient (API) sales grew 13.7 per cent to Rs 488.9 crore.
Organon acquisition on track
On the proposed Organon acquisition, Sun Pharma said integration planning was progressing as scheduled, with regulatory approvals secured in most regions. The transaction remains on track for closure in the fourth quarter of FY27.
The company indicated that acquisition-related expenses would continue to be recognised as it moves towards closing the transaction.
R&D spending and guidance
Research and development (R&D) expenditure for the quarter stood at Rs 778.4 crore, or 4.8 per cent of sales, with innovative R&D accounting for 32.4 per cent of the total.
“These numbers are tracking lower than our intended R&D spend, but we expect the second half of the year to catch up with some of this R&D spend,” said Dilip Shanghvi, Chairman.
Asked whether double-digit revenue growth in the first half would prompt an upgrade to its full-year guidance, management held firm.
“We’ll stick to what guidance we have given at the beginning of the year,” the company said, referring to its high-single-digit revenue growth forecast.
