India's Sun Pharmaceutical Industries Receives Bullish Recommendation from Prabhudas Lilladher, Target Price Set at Rs 2070

Sun Pharmaceutical Industries Sees Lower Q4FY26 EBIDTA Growth, Maintains Growth Visibility

Sun Pharmaceutical Industries (SUNP) reported a 6% year-over-year (YoY) growth in earnings before interest, taxes, depreciation, and amortization (EBIDTA) for the fourth quarter of fiscal year 2026. However, this growth fell short of the estimates provided by Prabhudas Lilladher's research report, primarily due to higher operating expenses (opex).

Despite the lower EBIDTA growth, Sun Pharma's key markets such as India and specialty segments continue to exhibit strong growth. The company's dependence on US generics has decreased significantly over the past few years, and its growth is now more reliant on specialty, Rest of the World (RoW), and domestic pharmaceutical segments that offer strong growth visibility. Sun Pharma's recent acquisition of Organon in an all-cash deal has provided the company with an entry into the biosimilars market and has diversified its branded generics portfolio. This acquisition is expected to be earnings per share (EPS) accretive from the first year and will see significant EPS accretion.

Outlook and Recommendations

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The company has managed to enjoy a higher multiple compared to its peers due to its exposure to a high-growth branded generics portfolio. To outperform the stock, the key will be to grow the acquired portfolio to a level greater than its historical run-rate. Prabhudas Lilladher's research report has maintained its 'BUY' rating for Sun Pharmaceutical Industries with a target price of INR 2,070, based on 23 times the fiscal year 2028 estimated combined entity EPS.