HSBC has maintained its ‘Buy’ rating on Sun Pharma but lowered its target price to ₹1,870, following a miss in Q4 earnings and the company’s announcement of $100 million in additional costs for new specialty product launches in FY26.
Sun Pharma’s Q4FY25 net profit dropped 19% YoY to ₹2,153.9 crore, while EBITDA grew 22.4% to ₹3,715.9 crore. Margin expansion to 28.7% was aided by cost discipline, but profitability was hit by a ₹361.6 crore exceptional loss.
The company has announced the launch of Leqselvi in Q2FY26, and expects increased costs associated with Unloxcyt and the closure of its Checkpoint deal, both of which are critical to expanding its specialty portfolio.
HSBC warned that these additional investments will likely hit EBITDA margins in the near term, but the spend is considered crucial for long-term growth in high-value, less competitive segments. The brokerage views the current weakness as a temporary trade-off to build durable revenue streams.
Disclaimer: This article is based on the brokerage report by HSBC. It does not constitute investment advice.
