Kotak Institutional Equities has maintained its add rating on Sun Pharma with a target price of ₹1,975, warning that newly announced US Medicare pilot programmes could have a material impact on the company’s specialty portfolio. The brokerage said the proposed GLOBE programme, which revises Medicare Part B inflation rebate calculations using international reference pricing (MFN methodology), poses a direct risk to the company’s flagship psoriasis therapy, Ilumya.
Kotak’s preliminary assessment suggests that in a worst-case MFN scenario, Sun Pharma could face a low double-digit EPS impact, though the final outcome will depend on the pricing benchmarks adopted by US regulators. The pilot programme is proposed for a five-year period from October 2026, making the next few quarters crucial for policy clarity.
The brokerage believes Sun Pharma is likely to pursue a negotiated resolution with the US government—similar to deals struck by 14 large global pharmaceutical companies—to mitigate the downside risk. Kotak emphasised that Sun Pharma continues to make progress in long-term growth drivers and remains well positioned operationally, but the Medicare-linked pricing overhang warrants monitoring.
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