Sun Pharmaceutical Industries, India's largest drug manufacturer, reported on Friday a 36% year-on-year decline in consolidated net profit, reaching ₹1,988.5 crore in the second quarter of the fiscal year 2026-27 (FY27). This decrease was attributed to significant exceptional expenses.
Meanwhile, operating revenue increased by 11.9%, amounting to ₹16,198.7 crore. The company accounted for exceptional expenses totaling ₹1,268.8 crore. These expenses include ₹922.7 crore spent on settling an antitrust lawsuit in the United States (US), as well as ₹346.2 crore for costs related to the proposed acquisition of Organon.
Excluding these exceptional items, the adjusted net profit stood at ₹3,162 crore, demonstrating a growth of 1.4% compared to the same period last year. The company noted that the margin was lower than the previous year because the previous quarter saw a rise in sales of the generic lenalidomide, which is now facing weakening in the US market.
The gross margin improved to 80.8%, and the effective tax rate rose from 24.7% to 28.3%. The results were announced during the trading session, after which Sun Pharma shares rose by 0.8% and closed at ₹1,778.25 on the BSE exchange.
Kirti Ganorkar, Managing Director, stated that the company's success in the reporting quarter was driven by strong momentum from India, emerging markets, and the rest of the world. Prescription drug sales in India grew by 17.3%, reaching ₹5,552.3 crore, accounting for 34.5% of total sales. According to Pharmarack's MAT data, Sun Pharma's market share increased from 8.3% to 8.6%.
During the quarter, the company launched 14 new products, and 19 in the first half of FY27. Prescription drug sales in the US decreased by 8.2% to $455 million, making up about 27% of the total volume. Research and Development (R&D) expenses for the quarter amounted to ₹778.4 crore, or 4.8% of sales. Dilip Shanghvi, Chairman, noted that these figures are below planned R&D expenditures but expects to reach some level of target R&D spending in the second half of the year.