Sun Pharmaceutical Industries (Sun Pharma) reported a steady second quarter for FY26, delivering consolidated net profit of ₹3,118 crore for the three months ended September 30, 2025. The result showed modest growth of a little over 2.5% year on year, achieved despite soft demand in some overseas markets and continued price pressure in U.S. generics. Management commentary emphasized a disciplined shift toward innovative medicines and branded therapies, which helped offset headwinds in traditional generics.
Consolidated revenue rose to about ₹14,405 crore, translating to growth of roughly 8.6% to 8.9% year on year. The increase came from strong performance in India, solid momentum across Emerging Markets and Rest-of-World geographies, and a larger contribution from the innovative medicines franchise. The revenue mix continued to tilt toward higher-value products, supporting healthier margins and more predictable earnings.
Operating metrics strengthened further. EBITDA increased to ₹4,527 crore, up 14.9% year on year. The EBITDA margin expanded to 31.3%, compared with 29.6% in the same quarter last year. The improvement came from a richer product mix, tighter operating controls, and continued focus on branded and specialty portfolios.
Research and development spending remained elevated at about ₹782.7 crore, or 5.4% of sales. This level of investment underlines a deliberate plan to build a pipeline in dermatology, oncology, and metabolic diseases, while maintaining a steady pace of filings and launches.
The innovative medicines portfolio was a highlight. Sales reached around US$333 million, up 16.4% year on year, contributing just over one-fifth of consolidated revenue. In the United States, innovative medicines surpassed generics in sales for the first time, marking a strategic crossover for the company.
Flagship brands such as Ilumya, Cequa, and Odomzo continued to perform well. Contribution from the newly launched Leqselvi (deuruxolitinib) for severe alopecia areata began to build through the quarter, following resolution of an earlier legal overhang that had delayed commercialization.
India sustained its role as the growth engine. Domestic formulations rose 11% year on year to ₹4,734.8 crore, accounting for 32.9% of consolidated sales. Market share in India inched up from 8.0% to 8.3% on a moving annual total basis through September 2025. Nine new products were launched during the quarter and fifteen in the year to date, covering multiple therapy areas. Strong physician engagement, brand equity, and a broad portfolio helped the India business deliver steady double-digit expansion and cushion fluctuations in global markets.
The U.S. business continued to navigate competitive pressure in generics, while shifting its center of gravity toward specialty and innovative products. Total U.S. formulations revenue came in at about US$496 million, down 4.1% year on year, affected by price erosion in select categories and a lower contribution from products such as lenalidomide compared with prior periods. Innovative brands softened the impact.
However, profitability in the near term reflected ongoing launch investments and the normalization of earlier one-off tailwinds. Over time, greater weight from innovative products is expected to lower volatility and improve margins, even if quarterly results remain choppy during the transition.
Performance outside India and the United States was broad-based. Emerging Markets formulations rose 10.9% to about US$325 million, supported by improving demand trends and steady execution. Rest-of-World formulations grew 17.7% to approximately US$234 million. Diversification across countries and channels reduced concentration risk and provided a useful counterbalance to the cyclical nature of U.S. generics.
External sales of active pharmaceutical ingredients (APIs) were softer, declining 19.5% year on year to about ₹430 crore. The API portfolio remains primarily an internal enabler for the formulations business, with selective external sales. While the downtick weighed on that segment’s topline, the overall group margin profile remained resilient thanks to the scale in formulations and specialty brands.
The quarter brought tangible progress in the pipeline and launches. In the United States, the commercial rollout of Leqselvi for severe alopecia areata moved ahead following the settlement with the originator company. The product is seen as an important building block in dermatology. Late-stage programs also advanced, including Ilumya in psoriatic arthritis and Fibromun in oncology, with multiple regulatory and clinical milestones lined up. Elevated R&D spending, along with an active cadence of filings, supports a sustained flow of products over the coming quarters.
Equity market reaction was measured. The reported profit growth—around 2.6% year on year—was seen as steady rather than spectacular, reflecting continued drag from U.S. generics and launch-related spending. At the same time, analysts highlighted the structural positives: rising share of innovative medicines, steady growth in India, and improving margins.
Compared with several Indian peers, domestic growth remained strong and consistent. Competitive intensity in U.S. generics continued to be an industry-wide challenge, reinforcing the logic of the shift toward specialty and branded portfolios.
The path ahead depends on a few critical variables. The commercialization cadence of Leqselvi will influence the revenue mix and the speed of margin improvement. Regulatory timelines for late-stage programs such as Ilumya in psoriatic arthritis and Fibromun will shape medium-term growth. Stabilization in U.S. generics, even at a lower base, would reduce earnings volatility.
Continued share gains in India, supported by new launches and strong field execution, should provide a reliable foundation. The company closed the quarter with 548 approved ANDAs and 117 pending in the United States, along with 57 approved NDAs and 14 pending. This breadth suggests healthy product flow across both generics and branded pathways.
The quarter underlined a clear strategic direction: build scale in innovative and specialty medicines, prune low-return generics, and reinvest in R&D where commercial infrastructure and therapeutic focus offer an edge. The crossover in the United States, where innovative medicines surpassed generics in sales, stands out as a symbolic and financial turning point. As specialty brands increase their share, the business should become more margin-accretive and less exposed to sharp pricing swings. While quarterly numbers may fluctuate due to launch costs and competitive dynamics, the structural mix is moving in a positive direction.
Q2 FY26 delivered a balanced scorecard. Net profit reached ₹3,118 crore, revenue rose to about ₹14,405 crore, and EBITDA increased to ₹4,527 crore with a margin of 31.3%. India grew 11% year on year to ₹4,734.8 crore, Emerging Markets rose to about US$325 million, Rest-of-World climbed to roughly US$234 million, and innovative medicines advanced to US$333 million, contributing just over 20% of total sales.
U.S. formulations at about US$496 million reflected ongoing pressure in generics, but the shift toward specialty continued. If the innovative portfolio sustains momentum and late-stage assets clear regulatory gates on schedule, earnings are positioned to tilt further toward high-margin, innovation-led growth, even as global headwinds persist.