Sun Pharma Financial Breakdown: Revenue, Profit, Ratios
Sun Pharmaceutical Industries, India's largest pharmaceutical company, reported its September-quarter (Q2 FY27) results on 30 October 2026 — and the headline numbers look contradictory at first glance. Revenue grew nearly 12% year-on-year, yet reported net profit fell 36%. The gap is explained by a ₹1,269 crore one-time charge. Strip that out, and the quarter tells a steadier story: strong India growth, a soft US market, and margins under mild pressure. This breakdown looks at Sun Pharma's five-year financial trend, its latest quarter, balance-sheet strength, key ratios, shareholding and peer comparison.
Sun Pharma Q2 FY27 Results: The Headline Numbers
For the quarter ended September 2026 (Q2 FY27), Sun Pharma reported (consolidated, as per its stock-exchange filing as reported on 30 October 2026):
- Revenue from operations: ₹16,199 crore, up 11.9% from ₹14,478 crore in Q2 FY26, and up about 6% sequentially from ₹15,300 crore in Q1 FY27.
- Reported net profit: ₹1,989 crore, down 36.2% from ₹3,118 crore a year earlier, and down 31% from ₹2,895 crore in Q1 FY27.
- Exceptional items: a ₹1,269 crore one-time loss, including a ₹923 crore charge (including legal costs) for a September settlement in US generic-pharmaceuticals pricing antitrust litigation, plus ₹346 crore of costs linked to the proposed Organon acquisition.
- Adjusted net profit (excluding exceptional items): ₹3,162 crore, up about 1% year-on-year.
- EBITDA: ₹4,744 crore, up 4.8% from ₹4,527 crore; EBITDA margin narrowed to 29.3% from 31.3% a year earlier.
- Profit before exceptional items and tax: ₹4,428 crore, up 6.3% year-on-year.
- R&D spend: ₹778 crore, or 4.8% of sales, of which 32.4% went to innovative medicines.
The key takeaway: the profit decline is driven by one-time items, not by a collapse in the operating business. Core operating profit actually grew, even as margins compressed.
Business Overview: What Sun Pharma Does
Sun Pharmaceutical Industries (NSE: SUNPHARMA, BSE: 524715), founded by Dilip Shanghvi and incorporated in 1993, makes branded and generic formulations and active pharmaceutical ingredients (APIs). It is India's largest drugmaker by market capitalisation (about ₹4.23–4.40 lakh crore as of 30 October 2026) and one of the world's largest specialty generic companies, with manufacturing facilities across India and overseas. The company reports a single operating segment — pharmaceuticals — so its results are best read by geography rather than by business line. Its specialty and innovative-medicines portfolio (including brands such as Ilumya, whose US approval for psoriatic arthritis was extended during the quarter) is the strategic growth engine, alongside a dominant India formulations business.
Revenue Trend: Five Years of Steady Growth
Sun Pharma's consolidated revenue from operations has grown every year for the last five years, compounding at roughly 11% a year:
| Financial year | Revenue from operations (₹ crore) | Year-on-year growth | PAT (₹ crore) | EPS (₹) |
|---|---|---|---|---|
| FY22 | 38,654 | — | 3,406 | 13.64 |
| FY23 | 43,886 | 13.5% | 8,561 | 35.32 |
| FY24 | 48,497 | 10.5% | 9,648 | 39.91 |
| FY25 | 52,578 | 8.4% | 10,980 | 45.55 |
| FY26 | 58,462 | 11.2% | 11,565 | 47.84 |
Two things stand out. First, revenue growth has been remarkably consistent — between 8% and 14% in each of the last four years, with no down year. Second, the FY22 profit base (₹3,406 crore) was depressed by one-time items, which is why profit growth since then looks exaggerated; the more meaningful comparison is FY23 onwards, where PAT rose from ₹8,561 crore to ₹11,565 crore (about 10–11% a year). Total income in FY26, including other income, was ₹60,434 crore.
Profitability and Margins
- Operating profit margin (OPM): 23.18% in FY26, against 23.79% in FY25 and 21.02% in FY24 — broadly stable in the low-20s.
- PAT margin: 19.78% in FY26, against 20.88% in FY25 and 19.89% in FY24.
- Q2 FY27 EBITDA margin: 29.3%, down from 31.3% in Q2 FY26 — the margin squeeze in the latest quarter came even as absolute EBITDA grew.
- H1 FY27 sales: ₹31,284 crore, up 11% year-on-year, showing the first-half trend matches the full-year FY26 growth rate.
The margin story matters more than any single quarter's profit number: Sun Pharma converts roughly one-fifth of revenue into net profit in a normal year, a level most Indian manufacturers cannot match.
Geographic Split: India Leads, US Softens (Q2 FY27)
Because Sun Pharma reports one segment, geography is the real split. In Q2 FY27:
| Geography / line | Q2 FY27 | Year-on-year change | Share of consolidated sales |
|---|---|---|---|
| India formulations | ₹5,552 crore | +17.3% | 34.5% |
| US formulations | $455 million | −8.2% | ~27% |
| Emerging markets formulations | $350 million | +7.6% | 20.7% |
| Rest of world formulations | $241 million | +3.1% | 14.3% |
| Global innovative medicines | $356 million | +6.9% | 21.1% |
| External API sales | ₹489 crore | +13.7% | — |
Note: innovative-medicines sales cut across geographies, so the rows above are not additive. India is now the company's largest market (34.5% of sales), its market share in the Indian pharmaceutical market rose to 8.6% in September 2026 from 8.3%, and it launched 14 products in India during the quarter (19 in H1 FY27). The US, by contrast, shrank 8.2% on price erosion in products such as lenalidomide.
Balance Sheet Strength and Cash Flow
- Total assets (31 March 2026): ₹1,08,785 crore; shareholders' funds (equity capital ₹240 crore plus reserves ₹83,330 crore) of about ₹83,570–83,880 crore.
- Total debt: about ₹4,082 crore against cash and equivalents of about ₹9,771 crore — the company is effectively in a net-cash position (net cash about ₹5,689 crore).
- FY26 cash flow: operating cash flow ₹12,419 crore, investing outflow ₹11,344 crore, financing outflow ₹2,513 crore, and free cash flow of about ₹8,810 crore.
- Dividend payout: 33.44% in FY26 (35.13% in FY25); dividend yield about 0.91% as of 30 October 2026 — Sun Pharma is a regular, not high-yield, dividend payer.
Key Ratios (FY26)
| Ratio | FY26 | FY25 (for comparison) |
|---|---|---|
| Return on equity (ROE) | 14.85% | 16.16% |
| Return on capital employed (ROCE) | 19.11% | 19.89% |
| Debt-to-equity | 0.05x | 0.03x |
| PAT margin | 19.78% | 20.88% |
| Operating profit margin | 23.18% | 23.79% |
| P/E (TTM, approx., 30 Oct 2026) | ~34.7x | — |
| Book value per share | ₹360.4 | — |
ROE has drifted down from its FY23–FY25 range (16–16.5%) as the equity base grew faster than profit, but ROCE near 19% still clears the company's cost of capital comfortably. Debt-to-equity of 0.05x is negligible for a company of this size — leverage is simply not a risk factor here.
Shareholding Pattern (September 2026)
| Category | September 2026 | June 2026 |
|---|---|---|
| Promoters | 52.68% | 54.48% |
| Foreign institutional investors (FII) | 14.36% | 14.53% |
| Domestic institutions (DII, incl. mutual funds 13.01%) | 22.27% | 22.18% |
| Public / retail and others | 10.70% | 8.81% |
The notable move in the September 2026 quarter is the promoter stake falling from 54.48% to 52.68%, with the public/retail share rising to 10.70% — consistent with a stake dilution or placement during the quarter. Promoter pledge is negligible (about 0.01% of the promoter holding). Domestic institutions have steadily raised their holding over the past year, from 20.23% in September 2025 to 22.27% in September 2026.
Peer Comparison: India's Pharma Heavyweights
| Company | Market capitalisation (approx., 30 Oct 2026) | P/E (TTM, approx.) | What sets it apart |
|---|---|---|---|
| Sun Pharma | ~₹4.23 lakh crore | ~34.7x | India's largest drugmaker; specialty + India-led growth |
| Cipla | ~₹1.09 lakh crore | ~32.4x | Strong India + US generics franchise |
| Lupin | ~₹0.90 lakh crore | ~16.2x | US generics and complex products; lower valuation multiple |
| Dr Reddy's Laboratories | ~₹1.09 lakh crore (ADR-based figure) | — | Global generics + biosimilars pipeline |
Sun Pharma is roughly four times the size of its nearest Indian listed peers by market capitalisation, and it trades at a premium multiple — a premium the market pays for scale, specialty exposure and a net-cash balance sheet. Peer market caps and multiples move daily; treat the figures above as approximate snapshots as of 30 October 2026, not live prices.
Key Risks to Watch
- US pricing pressure: US sales fell 8.2% in Q2 FY27 on price erosion; the US generics cycle remains the biggest swing factor for margins.
- Litigation and one-time charges: the ₹1,269 crore Q2 charge shows how US antitrust and acquisition costs can distort reported profit in any quarter.
- Organon acquisition execution: the proposed acquisition of Organon & Co. (definitive documents signed 27 April 2026) will test integration and capital allocation; deal costs already hit Q2 earnings.
- Specialty execution: growth increasingly depends on innovative medicines (21.1% of sales); R&D at 4.8% of sales must keep producing approvable products.
- Regulatory risk: USFDA inspections and approvals can move individual product lines sharply, in either direction — Ilumya's psoriatic-arthritis approval in Q2 is the positive side of the same coin.
FAQs
Why did Sun Pharma's profit fall 36% in Q2 FY27 if revenue grew 12%?
Because of a ₹1,269 crore exceptional charge — a US antitrust-litigation settlement and Organon deal costs. Excluding it, adjusted net profit rose about 1% to ₹3,162 crore.
What is Sun Pharma's biggest market?
India, at 34.5% of consolidated sales in Q2 FY27 (₹5,552 crore, up 17.3%), ahead of the US at about 27%.
Is Sun Pharma debt-free?
Effectively, yes: total debt of about ₹4,082 crore against cash of about ₹9,771 crore at end-FY26, a net-cash position of about ₹5,689 crore, and debt-to-equity of just 0.05x.
What is Sun Pharma's ROE and ROCE?
For FY26, ROE was 14.85% and ROCE was 19.11%, against 16.16% and 19.89% respectively in FY25.
Does Sun Pharma pay dividends?
Yes, regularly. The FY26 payout ratio was 33.44% and the dividend yield was about 0.91% as of 30 October 2026.
Conclusion
Sun Pharma's Q2 FY27 headline — profit down 36% — is misleading without the exceptional-items footnote. The underlying business grew revenue 12%, grew adjusted profit slightly, held EBITDA growth positive, and kept its balance sheet in a net-cash position. The five-year record is one of unusually steady compounding: revenue up from ₹38,654 crore in FY22 to ₹58,462 crore in FY26, profit up from a depressed FY22 base to ₹11,565 crore, and returns on capital near 19%. The watch items are the same ones that have always driven this stock: US pricing, specialty execution, and the Organon deal. For readers tracking India's pharma leaders, Sun Pharma remains the scale benchmark against which Cipla, Dr Reddy's and Lupin are measured.
Disclaimer: This article is for educational purposes only and is not investment advice. Figures are drawn from the company's exchange filings as reported on 30 October 2026 and from financial data portals (Screener/Value Research/ET Money/MarketsMOJO); portal figures may differ slightly by methodology. Please verify figures from the company's official results before making any investment decision.
Read more company breakdowns on IPOlist.in: Reliance Industries Financial Breakdown and Trent Financial Breakdown.