Sun Pharma Stock Takes a Hit as Q4FY25 Net Profit Declines
Shares of Sun Pharmaceutical Industries saw a nearly 5 per cent drop in early trade due to a decline in net profit in Q4FY25. The company reported a 19 per cent decrease in consolidated net profit for the quarter ending March 2025, coming in at ₹2,149 crore compared to ₹2,654 crore in the same period last year. Despite this, gross sales saw an increase of 8.5 per cent, reaching ₹12,815 crore. For the full fiscal year, Sun Pharma recorded a 12 per cent growth in net profit, totaling ₹10,929 crore, with gross sales of ₹52,041 crore, up by 9 per cent.
Brokerages Express Concern Over Adjusted EBITDA Margin
Brokerages have expressed some concerns over Sun Pharma’s performance, particularly noting that the adjusted EBITDA margin fell short of consensus estimates. Nuvama Institutional Equities maintained a hold rating on the stock with a target price of ₹1,830, while also reducing the EBITDA margin estimates for FY26/27 by 30 bps/40 bps. They anticipate an 8 per cent PAT CAGR over FY25-27, citing Sun Pharma’s improving product mix as a potential mitigating factor against higher operating costs and tax rates. However, there is uncertainty surrounding potential tariffs and pricing adjustments under the MFN pricing, which could impact future earnings.
SBI Securities and Motilal Oswal Offer Contrasting Views
SBI Securities expects Sun Pharma’s stock to trade in the range of ₹1,700-₹1,800 in the short to medium term. The brokerage remains optimistic about the company’s growth prospects, driven by strong performance in specialty and generic portfolios, as well as new product launches. On the other hand, Motilal Oswal maintains a buy rating with a higher target price of ₹2,000 but has reduced FY26/FY27 estimates by 3 per cent and 1 per cent, respectively. This adjustment accounts for additional spending on marketing and promotion for specialty products. Citi has retained a buy call at ₹2,200 per share, while Nomura has assigned a neutral rating at ₹1,970 per share, citing lower-than-expected Q4 performance due to decreased US revenues.
Stock Trades Lower on BSE
As of 10:37 am, Sun Pharma’s stock was trading 2.93 per cent lower on the BSE at ₹1,669.55, after hitting a low of ₹1,636.30. Despite the decline, the company’s future performance remains uncertain, with various brokerages offering differing perspectives on its outlook. Investors will be closely monitoring Sun Pharma’s strategic moves in the coming months to gauge its ability to navigate challenges and sustain growth in a competitive market environment.