Shares of Sun Pharmaceutical Industries Ltd. (Sun Pharma) saw a notable climb on Friday, despite the company reporting a significant 36.22% year-on-year decline in its consolidated net profit for the September quarter (Q2 FY27). The pharma giant's net profit stood at Rs 1,988.53 crore, a sharp drop from Rs 3,117.95 crore in the same period last year.
The dip in profitability was primarily attributed to a one-time loss of Rs 1,269 crore incurred during the quarter. This loss was linked to ongoing US litigation and the proposed acquisition of Organon.
Key Factors Boosting Share Performance
Despite the profit setback, Sun Pharma's stock closed 3.24% higher at Rs 1,820.10. Several positive developments contributed to this investor confidence:
- USFDA Approval for Ilumya: The US Food and Drug Administration (USFDA) granted approval for the supplemental Biologics License Application (sBLA) for Ilumya (tildrakizumab-asmn). This approval expands Ilumya's indications to include the treatment of adults with active psoriatic arthritis, a significant market expansion.
- Robust Revenue Growth: The company's revenue from operations surged by 11.88% year-on-year, reaching Rs 16,198.71 crore in Q2 FY27, up from Rs 14,478.31 crore in the prior-year quarter.
- Progress on Organon Acquisition: Sun Pharma reported smooth progress in the integration planning for its acquisition of US-based Organon, with regulatory approvals secured in most regions and others on schedule.
Strong Operational Metrics
Sun Pharma's other financial metrics also painted a positive picture. Global innovative medicines sales reached $356 million, demonstrating a 6.9% growth and accounting for 21.1% of total sales. The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 4.8% to Rs 4,743.9 crore, with an EBITDA margin of 29.3%. Research and development (R&D) investment for the quarter was Rs 778.4 crore, representing 4.8% of sales.
Kirti Ganorkar, Managing Director of Sun Pharma, commented, "Our performance during the quarter was driven by strong momentum in India, Emerging Markets and Rest of World. Among key developments, Ilumya is now approved in the US for the treatment of adults with active psoriatic arthritis."
The approval of Ilumya for psoriatic arthritis is backed by Phase 3 INSPIRE-1 and INSPIRE-2 clinical studies, which evaluated its efficacy and safety in adult patients over 24 weeks.