Sun Pharma Q4FY25 results preview: Specialty push and domestic growth to lift earnings

Sun Pharma Q4 FY25 Preview: Specialty push and domestic growth to lift earnings

Sun Pharmaceutical Industries is set to announce its Q4FY25 results on May 22, with analysts expecting a steady performance driven by strong momentum in the US specialty business and continued robust growth in the Indian market.

Brokerages expect strong gRevlimid sales in Q4 for the US region, while the India business is expected to grow ahead of the market. The ROW segment may see a 4 percent year-on-year decline.

According to a Moneycontrol poll of five brokerage firms, Sun Pharma is expected to reflect continued strength in specialty and chronic therapies, with margin improvement and robust domestic growth.

Last quarter, Sun Pharma had reported a revenue of Rs 13,437 crore with net profit at Rs 2,903 crore and EBITDA margin at 29.3%. Last financial year, the fourth quarter saw revenue at Rs 11,813 crore with net profit at Rs 2,655 crore and EBITDA margin at 25.3%.

For Q4FY25, among the brokerages, the most optimistic view is by HSIE, showing estimated revenue figure at Rs 13,160 crore, with Goldman Sachs expecting the lowest at Rs 11,982 crore.

On an average, brokerages estimates point toward a subtle increase in the backdrop of a muted earnings season, with Rs 12,912 crore in revenue with net profit average being Rs 2,814 crore. Meanwhile, EBITDA margin estimated average stands at 27.16%.

Brokerages expect Sun Pharma’s US business to post a sequential improvement in Q4, largely on the back of higher specialty sales and a sharp pick-up in gRevlimid (generic Revlimid) exports. Brokerages are taking into consideration that export data indicates Sun Pharma shipped gRevlimid worth approximately $230 million (about Rs 1,900 crore) in Q4, likely to pre-empt the potential impact of US tariffs. Therefore, estimates are that Sun Pharma may book $100 million (around Rs 830 crore) in gRevlimid sales for the quarter, taking overall US sales to $539 million (roughly Rs 4,480 crore).

Excluding gRevlimid, the rest of the US generics portfolio is expected to remain subdued, with prescription share declines noted for products like gPentasa and gCiprodex.

US sales is also likely to improve marginally by 2 percent quarter-on-quarter, led by specialty products, while the Taro and US generics business may remain flat.

Sun Pharma’s India business is expected to maintain its double-digit growth trajectory in Q4, outpacing the broader market. Nomura attributes this to the company’s strong presence in chronic therapies, new product launches, and the expansion of its sales force in recent quarters. BNP Paribas also expects the domestic formulations business to continue its robust performance, supporting overall revenue growth and margin expansion.

On the US tariff front, Kotak Institutional Equities notes that any potential tariffs on Indian pharma exports would likely be passed on to customers, and Sun Pharma does not foresee any short-term impact. The brokerage highlights that India’s competitive advantage in pharmaceutical manufacturing is structural and long-term, as it takes 5–7 years to shift production to the US.

Nomura expects the Rest of World (ROW) segment to decline by 4 percent year-on-year in Q4, following higher specialty sales in ex-US markets in Q3. The brokerage notes that while there are currency tailwinds in most emerging markets, Latin America remains an exception.

On the margin front, EBITDA margin is likely to improve on the back of favourable product mix and operating leverage. The company had lowered its R&D guidance to below 7 percent of sales for FY25 in the previous quarter. Brokerages have estimated R&D spend to be at 6.7 percent of sales in Q4.

Looking ahead, Sun Pharma may guide for R&D spends above 8 percent, with the possibility of multiple Phase 3 clinical trials commencing in the second half of FY26.

Investors will be keenly watching management’s commentary on the sustainability of US specialty product growth, the impact of potential US tariffs, and the outlook for the Indian business. Updates on the specialty pipeline, progress in clinical trials, and guidance for FY26 revenue and R&D spends will also be in focus.