Sun Pharma tanks 6% on weak Q1; Choice sees 11% upside; here’s target price

Shares of Sun Pharma fell 6 per cent in Friday’s trade as the pharmaceutical major posted a 20 per cent year-on-year (YoY) fall in net profit at Rs 2,279 crore for Q1 FY26, compared with Rs 2,835 crore in the year-ago period.

The stock fell 5.7 per cent to hit a low of Rs 1,608.30 on BSE over its previous day’s closing of Rs 1,705.55 apiece. At 10:08 am, the scrip was trading 3.39 per cent lower at Rs 1,647.70. Choice Broking maintained an ‘ADD’ rating and a target price of Rs 1,825 on Sun Pharma. At the prevailing price, the target suggests 11 per cent potential upside. 

Total revenue from operations for the quarter rose 9.5 per cent to Rs 13,851 crore in Q1 from Rs 12,653 crore in the corresponding quarter last year, Sun Pharma reported.

The company’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at Rs 4,302 crore.

At last count, Sun Pharma was leading Sensex losers. The stock is now nearly 18 per cent off its 52-week high of Rs 1,960.20. 

Dilip Shanghvi, Chairman and Managing Director of Sun Pharma, said, "Sun had a strong performance during the quarter, where the overall growth reflects steady progress across all our markets. 

“India continues to show strong momentum, contributing meaningfully to our performance. The U.S. launch of LEQSELVI represents an important step forward, offering a new treatment option for patients with severe alopecia areata. LEQSELVI augments our portfolio in dermatology and adds a growth engine to our Innovative Medicines business," Shanghvi said.

Choice Institutional Equities said the revenue grew 9.5 per cent YoY to Rs 13,851 crore, in line with estimates, while EBITDA rose 19.2 per cent YoY to Rs 4,302 crore, beating the Street’s expectation. EBITDA margins expanded to 31.1 per cent, higher than the consensus estimate of 28 per cent.

Choice Institutional Equities said the company’s India formulation business posted strong volume-led growth of 13.9 per cent YoY, while the US business was supported by specialty launches like LEQSELVI. Ilumya’s Phase 3 trial success and expected regulatory filing by CY25 further strengthen the pipeline.

“We expect Sun Pharma to continue delivering healthy growth driven by new launches, particularly from its innovative pipeline,” the brokerage said.