Nomura has retained its ‘Neutral’ stance on Sun Pharma with a target price of ₹1,970, stating that Q4FY25 performance came in below expectations, primarily due to lower US revenue contribution. The brokerage also expressed concern over margin compression in the near term, given the company’s rising investment needs.
The company posted a net profit of ₹2,153.9 crore, down 19% YoY, while EBITDA rose 22.4% YoY to ₹3,715.9 crore. Margins improved to 28.7%, but the overall sales growth and guidance fell short of street estimates.
Sun Pharma guided for FY26 revenue growth in the mid-to-high single digits, below Nomura’s prior 10% estimate. The company also indicated that overhead spending will increase ahead of revenue, which could negatively impact EBITDA margins.
Nomura sees these developments as a recalibration period for Sun Pharma as it invests in specialty product launches, while managing ongoing macro and regulatory volatility. For now, the brokerage prefers to remain on the sidelines until visibility on margin trajectory improves.
Disclaimer: This article is based on the brokerage report by Nomura. It does not constitute investment advice.
