Buy Sun Pharma; target of Rs 1960: Motilal Oswal

BUY

Motilal Oswal's research report on Sun Pharma

Sun Pharma (SUNP) delivered in-line revenue/EBITDA in 2QFY26. Earnings came in below our estimates largely due to lower other income. The growth momentum remained intact in global innovative medicines, driven by its increasing reach and enhanced traction in the existing markets. Interestingly, sales of innovative medicines surpassed generics in the US for the first time in 2QFY26. This implies that innovative medicines sales would be at least USD250m in the US in 2QFY26.

Outlook

We reduced our earnings estimates by 4%/6%/3% for FY26/FY27/FY28, factoring in marketing spends on global innovative medicines and a higher tax rate. We value SUNP at 32x 12M forward earnings to arrive at a TP of INR1,960.

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