Sun Pharma shares slide 5% after Q1 profit falls 20% YoY. Should you buy, sell or hold?

Sun Pharmaceutical shares fell 4.6% to an intraday low of Rs 1,626.50 on BSE on Friday after the drug major reported a 20% year-on-year (YoY) decline in consolidated net profit to Rs 2,278 crore for Q1FY26, compared to Rs 2,836 crore in the same quarter last year.

Revenue from operations rose 10% to Rs 13,786 crore from Rs 12,525 crore a year ago. Sequentially, PAT grew 6% from Rs 2,150 crore in Q4FY25, while revenue rose 8% from Rs 12,816 crore.

EBITDA for the quarter stood at Rs 4,302 crore, up 19.2% YoY, with margins improving to 31.1%.

Dilip Shanghvi, Chairman and MD, said the company delivered a strong performance with consistent growth across markets. “India continues to show strong momentum, contributing meaningfully to the overall performance. The U.S. launch of LEQSELVI is a significant milestone, expanding our dermatology portfolio and strengthening our Innovative Medicines business,” he said.

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Should you buy, sell, or hold Sun Pharma's stock? Here’s what brokerages say:

Nuvama

Maintained a target price of Rs 1,830 with a ‘Hold’ rating.

The brokerage cited margin outperformance driven by improved product mix and growth in the Rest of World (ROW) markets. FY26 is expected to be investment-heavy, with higher spending on Leqselvi and Unlocxyt promotions and the start of Phase II trials for GLO034. Nuvama projects revenue and PAT to grow at a CAGR of 9% and 8% respectively, over FY25–FY27. Key triggers include Ilumya PsA trial data and progress in the innovative product pipeline.

Avendus

Upgraded the rating to ‘Add’ from ‘Reduce’ and raised the target price to Rs 1,830 from Rs 1,770.

While launch-related costs for Leqselvi and Unlocxyt may impact FY26 margins, meaningful gains are expected in FY27. India formulations and innovative drugs will continue to drive growth. Avendus expects FY27 EPS to rise 3% and projects a 14% CAGR in the India business over FY25–FY27. EBITDA margins are seen dipping to 28% in FY26 before recovering to 31% in FY27. A net cash position of $3.1 billion provides flexibility for inorganic growth.

Motilal Oswal

Lowered the target price to Rs 1,960 from Rs 2,000 but retained a ‘Buy’ rating.

It cited strong earnings support from the innovative and branded portfolio. While regulatory clarity on US tariffs remains a key monitorable, launches like Leqselvi and pipeline filings for Ilumya are seen strengthening the speciality segment. However, higher operating expenses and tax rates have led to a cut in FY26/FY27 earnings estimates by 5% and 4% respectively. Still, the brokerage expects a 14% CAGR in earnings over FY25–FY27.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)