Sun Pharma Share Price Falls After Q1 Results Despite 27% Profit Jump; Should You Buy/ Sell This Pharma Stock?

Sun Pharma Q1 Results FY27: Profit Rises 27%, Revenue Crosses Rs 15,300 Crore

For the quarter ended June 2026, Sun Pharma reported a consolidated net profit of Rs 2,895 crore, registering a robust 27% year-on-year growth from Rs 2,279 crore reported in the corresponding quarter last year.

The Mumbai-headquartered drugmaker also delivered steady top-line growth, with revenue from operations increasing 10% to Rs 15,300 crore, compared with Rs 13,851 crore in Q1 FY26. The performance was largely supported by resilient demand in the domestic formulations business, which continued to remain the company's biggest growth engine.

At the operating level, EBITDA rose 3% year-on-year to Rs 4,418 crore from Rs 4,302 crore a year ago. However, profitability was impacted by a decline in margins, with the EBITDA margin slipping to 28.9% from 31.06% in the year-ago quarter, indicating higher operating costs and an evolving product mix.

India Business Shines, US Sales Remain Under Pressure

Sun Pharma's domestic business once again emerged as the standout performer during the quarter. India sales surged 16% year-on-year to Rs 5,475 crore, accounting for 36.1% of the company's consolidated revenue, highlighting continued strength in prescription demand across key therapeutic segments.

The picture, however, was mixed overseas. US formulations sales declined 9.7% year-on-year to $427 million, as weakness in the generics business weighed on performance. The company noted that this decline was partly offset by continued momentum in its innovative medicines portfolio. The US market contributed 26.6% of consolidated sales during the reporting quarter.

Although Sun Pharma reported stronger earnings, the market reaction remained subdued. Investors appeared concerned about the moderation in operating margins and the continued decline in the US formulations business. The stock had also witnessed a strong run-up ahead of the earnings announcement, prompting some investors to lock in gains despite the healthy financial performance.

Should You Buy or Sell Sun Pharma Stock? Motilal Oswal's Recommendation & Target Price

Despite the near-term weakness in the share price, domestic brokerage Motilal Oswal Financial Services has retained its positive stance on the pharmaceutical major, reiterating its 'Buy' recommendation.

The brokerage has maintained a target price of Rs 2,310, implying an upside potential of around 16% from its reference price.

"We maintain our earnings estimates for FY27/FY28. We value SUNP at 38x 12-month forward earnings to arrive at a TP of INR2,310. SUNP remains on track to expand its innovative medicine portfolio through enhanced marketing efforts on new launches, increasing the prescriber base and the prescription rate for existing products... Accordingly, we build in an 11% earnings CAGR over FY26-28. Maintain BUY," said the brokerage.

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