Citi has maintained its ‘Buy’ rating on Sun Pharmaceutical Industries with a target price of ₹2,220, noting that Q4FY25 results were largely in line with expectations. The brokerage remains optimistic about Sun’s strategic pivot toward specialty therapies despite short-term EPS dilution.
Sun Pharma reported a 19% year-on-year decline in net profit to ₹2,153.9 crore, impacted by an exceptional loss of ₹361.6 crore. However, operationally, the company delivered solid growth — EBITDA rose 22.4% YoY to ₹3,715.9 crore, with margin expanding to 28.7% from 25.3% last year.
Citi pointed out that strength in India and emerging markets offset weakness in the US generics portfolio. Specialty revenue softness was anticipated due to channel filling and milestone-driven upsides in Q3, which had been flagged by the management earlier.
Citi was encouraged by management’s positive commentary on the Most Favored Nation (MFN) pricing impact, which had been seen as a key overhang for the sector. While Sun’s FY26 revenue guidance of mid-to-high single-digit growth reflects caution in light of regulatory and geopolitical uncertainties, the planned $100 million investment in launches like Leqselvi and Unloxcyt signals a ramp-up in the specialty business.
Despite a 6% cut in FY26 EPS estimates, Citi believes the investments are necessary to build long-term value.
Disclaimer: This article is based on the brokerage report by Citi. It does not constitute investment adv
