Sun Pharma Q2 FY26 net profit falls 36% to ₹1,989 crore; revenue rises 11.9% to ₹16,199 crore on strong India sales

Sun Pharmaceutical Industries reported a 36.2% year-on-year decline in consolidated net profit to ₹1,989 crore for the second quarter of FY27, as exceptional expenses related to its proposed acquisition of US-based Organon and other charges weighed on earnings. The homegrown drugmaker had posted a consolidated net profit of ₹3,118 crore in the corresponding quarter of the previous financial year.

However, revenue from operations increased 11.9% year-on-year to ₹16,199 crore during the July-September quarter, compared with ₹14,478 crore a year earlier. The company's revenue growth was supported by strong performances in its domestic formulations business and emerging markets.

The exceptional items amounted to approximately ₹1,269 crore during the quarter, significantly impacting the reported bottom line. Excluding these charges, adjusted net profit stood at approximately ₹3,162 crore.

Commenting on the quarterly performance, Managing Director Kirti Ganorkar said the company's growth was driven by strong momentum in India, emerging markets and the rest of the world.

The company invested ₹778.4 crore in Research and Development (R&D) during the quarter, equivalent to 4.8% of its sales. Sun Pharma also received US approval for Ilumya for treating adults with active psoriatic arthritis.

India business drives growth, US formulations remain under pressure

Sun Pharma's India formulations business recorded sales growth of 17.3% to ₹5,552 crore, accounting for 34.5% of consolidated sales. The performance reinforced the domestic market's position as the company's largest revenue contributor.

In contrast, US formulations sales declined 8.2% to $455 million, accounting for approximately 27% of total sales. Emerging markets formulations revenue increased 7.6% to $350 million, while global innovative medicines sales rose 6.9% to $356 million.

Operating performance also reflected some margin pressure. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 4.8% to ₹4,744 crore from ₹4,527 crore in the year-ago quarter. However, the EBITDA margin contracted to 29.3% from 31.3%.

Organon deal and US litigation settlement weigh on earnings

The exceptional charge included ₹346.16 crore towards acquisition-related expenses associated with the proposed Organon transaction. This covered due diligence, legal and filing fees, commitment fees and other transaction-related costs.

Sun Pharma also recognised ₹922.67 crore, including legal costs, towards the settlement of US generic pharmaceutical pricing antitrust litigation. The company entered into a settlement agreement with a plaintiff in the Eastern District of Pennsylvania on September 10, 2026.