Sun Pharma slips 2% as Ilumya sales slow in Q2

Limited (SUNPHARMA) traded 1.6% lower at ₹1,749.80 on November 2 after management flagged slower sales of its key specialty drug Ilumya. Reported Q2 FY27 net profit fell 36% to ₹1,988.5 crore, announced on October 30. Revenue grew 11.9% to ₹16,198.7 crore, led by a 17.3% rise in India formulations. US formulation sales fell 8.3%. Profit was hit by ₹1,268.8 crore of one-time charges linked to a US antitrust settlement and the pending Organon acquisition. Adjusted profit rose 1.4% to ₹3,162 crore. The one-time charges explain the headline fall, not the business. The India business is growing strongly, and gross margin improved to 80.8% from 79.3%. Management also reiterated its high single-digit growth guidance for FY27, and 35 of 40 analysts covering the stock rate it a Buy. The concern is Ilumya, which made up 12% of FY26 sales. Its slowdown, along with falling US sales, is squeezing margins. EBITDA grew only 4.8%, and the EBITDA margin slipped to 29.3% from 31.3%. Emkay cut its target to ₹2,000. Investors should watch Ilumya’s psoriatic arthritis launch in November, US sales trends and the Organon deal closing. The key question is whether Ilumya can regain growth fast enough to protect margins. Disclosure: I do not hold any position in Sun Pharmaceutical Industries Limited. This post is for informational purposes only and is not investment advice.