Lupin vs Sunpharma Q3 FY26

LU

Lupin

Q3 FY26 · Diversified

Lupin delivered a strong Q3 FY26 with revenue of ₹7,168 crore (+24% YoY) and EBITDA margin of 31.1% (+681 bps YoY), driven by broad-based growth across regions. US sales hit a record $350 million (+46% YoY), supported by Tolvaptan exclusivity and Mirabegron settlement. India prescription business grew 10.9% YoY, with chronic share rising to 67%. Management raised FY26 EBITDA margin guidance to 27-28% (from 25-26%) and expects FY27 margins of 24-25% due to R&D investments and product mix. Key growth drivers include biosimilars (Pegfilgrastim launch imminent), injectables pipeline, and semaglutide launch in India. Risk: Mirabegron settlement costs and potential generic competition could pressure US profitability.

Guidance read

FY26 EBITDA margin guidance raised to 27-28%: Management raised full-year EBITDA margin guidance to 27-28% from earlier 25-26%, citing strong operational performance. FY27 EBITDA margin expected at 24-25%: For FY27, management guided EBITDA margin of 24-25%, factoring in higher R&D spend and potential product mix changes. R&D spend to remain 7.5-8.5% of sales: R&D expenditure is expected to stay in the 7.5-8.5% range going forward, with focus on complex generics and biosimilars. Semaglutide launch in India with first-year revenue target: Management expects semaglutide to be a ₹1,500 crore market opportunity in year one, with Lupin targeting ₹50-60 crore in first-year sales.

Risk read

Key risks include Mirabegron settlement costs and competition — The $90 million settlement (with $75 million amortized) will impact profitability, and potential generic entrants could erode market share.; US base business price erosion — Low single-digit price erosion in the US base business persists, which could offset volume gains if new product launches slow.; Biosimilar market competition — Increasing competition in biosimilars, including PBM private labels, could pressure margins despite Lupin's cost advantage.; Elixa development delays — The respiratory product Elixa has faced development delays; management expects material progress only in calendar 2026..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Sun Pharma delivered a strong Q3 FY26 with consolidated revenue of INR 15,469 crore (+15.1% YoY) and EBITDA of INR 4,949 crore (+23.4% YoY), driven by broad-based growth in India (+16.2%) and emerging markets (+21.6%), partially offset by flat US sales. EBITDA margin expanded to 31.9% on better product mix, while PAT grew 16% to INR 3,369 crore despite a higher tax rate. Management highlighted the upcoming launch of generic semaglutide in India as a key growth catalyst, with approvals received for both diabetes and weight management. However, US generic sales remain under pressure from competition and manufacturing compliance issues, and the company faces uncertainty from proposed US pricing reforms. The strong balance sheet (net cash $3.2B) provides M&A flexibility, though management remains disciplined.

Guidance read

Semaglutide launch in India on patent expiry: Sun Pharma plans to launch generic semaglutide in India on day one of patent expiry for both chronic weight management and type 2 diabetes, under brands NovelTreat and SemaTrinity. R&D spend guidance for next year: Management indicated they will provide R&D spend guidance for the next fiscal year in the next quarter's call. Phase 2b trial for GL0034 to complete in 12-18 months: The phase 2b study for GL0034 in type 2 diabetes has started and is expected to complete within 12-18 months.

Risk read

Key risks include US generic sales pressure from competition — US generic sales declined due to additional competition on certain products, and recovery depends on resolving manufacturing compliance issues at several sites.; Proposed US Most Favored Nation pricing models — CMS proposed pricing models could impact US revenues; management declined to share mitigation strategies, citing commercial sensitivity.; Higher effective tax rate impacting PAT growth — Effective tax rate rose to ~25% from ~15% last year, dampening PAT growth relative to EBITDA growth; expected to remain in that range.; Milestone income may not recur — Management noted that milestone income of $55 million in Q3 may not recur in future quarters, potentially impacting revenue comparability..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.