Sun Pharma: Is It the Right Time to Buy the Stock After ₹1,30,000 Cr Acquisition Plan?

Synopsis: Jefferies has a Buy call on Sun Pharma, citing a potential 30% upside driven by the Organon acquisition, though higher leverage and limited R&D gains pose key risks.

This large-cap Pharma Stock, engaged in developing, manufacturing, and marketing generic medicines, specialty drugs, APIs, and formulations for global healthcare needs, is in focus after Jefferies gave a target price of Rs. 2,100, which has an upside potential of 30.27 percent.

With a market capitalization of Rs. 3,88,947.03 crores, the share of Sun Pharmaceutical Industries Limited has reached an intraday high of Rs. 1,645 per equity share, rising nearly 2.05 percent from its previous day’s close price of Rs. 1,612. Since then, the stock has retreated and is currently trading at Rs. 1,621.10 per equity share. 

Jefferies, a prominent brokerage firm, has recommended a “Buy” call on Sun Pharmaceutical Industries Limited with a target price of Rs. 2,100 per share, indicating an upside potential of 30.27 percent from its previous day’s close price of Rs. 1,612.

Jefferies positive view on Sun Pharmaceutical Industries reflects the potential strategic benefits from the proposed $10-14 billion acquisition of Organon, which would be the company’s largest deal so far. 

The acquisition could significantly expand Sun Pharma’s global presence, therapy portfolio, and manufacturing footprint, while also marking its entry into the biosimilars space. This added scale could help Sun diversify revenues and strengthen its position in international markets.

The proposed Organon acquisition gives Sun Pharma entry into the biosimilars segment, but it does not meaningfully improve its new chemical entity (NCE) pipeline or R&D strength. Organon is also operating under interim management after its CEO’s resignation in October 2025, which adds execution risk. 

While revenues may nearly double post-acquisition, the combined entity would be highly leveraged, keeping valuations at the upper end and tempering upside expectations.

Domestic Business

Sun Pharma’s India formulations business delivered a strong performance, with revenue of Rs. 4,734.8 crore in Q2 FY26, growing 11 percent YoY and contributing 32.9 percent to consolidated sales. The company strengthened its leadership position, increasing market share to 8.3 percent from 8.0 percent, and outperformed the overall Indian Pharmaceutical Market during the quarter.

Management highlighted that growth was driven mainly by higher volumes and new product launches, unlike the broader market, which was largely price-led. Sun Pharma continued to lead in prescription volumes, ranking #1 across 13 doctor categories, and further strengthened its portfolio with nine new product launches in Q2.

U.S. business

Sun Pharmaceutical Industries Limited’s U.S. business saw mixed performance, with total sales at $496 million, down 4.1 percent YoY, contributing about 30 percent to consolidated revenue. While the innovative medicines (IM) portfolio continued to grow, led by ILUMYA, CEQUA, and ODOMZO. Sun Pharmaceutical Industries Limited maintained focus on execution, launching three new generic products in the U.S. during Q2 to support future growth.

Company Overview

Sun Pharmaceutical Industries Limited was founded in 1983 by Dilip Shanghvi in Vapi, Gujarat, and operates as India’s largest pharmaceutical company worldwide. The company develops and sells generic medicines, specialty drugs for psychiatry, cardiology, oncology, and dermatology, along with APIs and formulations. 

Recent Quarter Results

Coming into financial highlights, Sun Pharmaceutical Industries Limited’s revenue has increased from Rs. 13,291 crore in Q2 FY25 to Rs. 14,478 crore in Q2 FY26, which has grown by 8.93 percent. The net profit has also grown by 2.90 percent from Rs. 3,037 crore in Q2 FY25 to Rs. 3,125 crore in Q2 FY26.

Sun Pharmaceutical Industries Limited’s revenue and net profit have grown at a CAGR of 10.80 percent and 47.90 percent, respectively, over the last three years.

In terms of return ratios, the company’s ROCE and ROE stand at 20.2 percent and 16.9 percent, respectively. Sun Pharmaceutical Industries Limited has an earnings per share (EPS) of Rs. 43.6, and its debt-to-equity ratio is 0.07x.

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