Sunpharma vs Apollohosp Q1 FY26

Sun Pharma reported Q1 FY26 consolidated revenue of INR 13,786 crore, up 10.1% YoY, driven by India formulation growth of 13.9% and global Innovative Medicines growth of 16.9%. EBITDA came in at INR 4,302 crore (margin 31.1%), aided by favorable product mix and lower material costs. Reported PAT was INR 2,279 crore, down 19.6% YoY due to exceptional items of INR 818 crore (SCD-044 impairment and GxMDL settlement). Key highlights include the U.S. launch of Leqselvi for alopecia areata and positive phase III data for ILUMYA in psoriatic arthritis. Management guided for R&D spend of ~6-7% of sales and $100M incremental launch costs for Leqselvi and UNLOXCYT. Risks include ongoing FDA warning letters at three facilities and potential pricing pressure on lenalidomide.

Guidance read

ILUMYA PsA filing by end of CY2025: Sun Pharma plans to file for psoriatic arthritis indication for ILUMYA before end of calendar year 2025. UNLOXCYT launch in H2 FY2026: UNLOXCYT will be launched in the U.S. in the second half of FY2026, pending label update. Incremental $100M cost for Leqselvi and UNLOXCYT in FY2026: Management expects to incur approximately $100 million in direct costs (excluding amortization) for the launches of Leqselvi and UNLOXCYT during FY2026. Effective tax rate around 25% for FY2026: CFO guided for an effective tax rate of approximately 25% for the full fiscal year, up from 16-17% last year.

Risk read

Key risks include FDA warning letters at three facilities — Halol, Mohali, and Dadra facilities remain under FDA warning letters, limiting generic approvals and U.S. supply flexibility.; Lenalidomide pricing pressure — Generic lenalidomide continues to face pricing erosion, impacting U.S. generic business performance.; Leqselvi and UNLOXCYT launch execution risk — New product launches may face slower-than-expected formulary coverage or market adoption, impacting revenue ramp.; Potential U.S. tariffs on pharmaceuticals — While currently exempt, pharma may face tariffs after the 232 investigation, which could impact U.S. business margins..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.

Apollo Hospitals delivered a strong Q1 FY26 with consolidated revenue of INR 5,842 crore (+15% YoY) and PAT of INR 433 crore (+42% YoY). Healthcare Services revenue grew 11% to INR 2,935 crore, with EBITDA margins at 24.5% (+88bps YoY). Apollo HealthCo revenue rose 19% to INR 2,472 crore, driven by pharmacy distribution and narrowing digital losses (EBITDA loss of INR 73 crore vs INR 116 crore last year). The company added 700 beds in the pipeline and expects to operationalize them in FY26. Management guided for 13-14% organic hospital growth and Apollo 24/7 breakeven by Q4 FY26. Risk: New hospital ramp-up may cause a ~100bps margin dip in the near term.

Guidance read

Apollo 24/7 breakeven by Q4 FY26: Digital business expected to achieve EBITDA breakeven by end of fiscal year, with GMV run-rate of INR 800-900 crore. 700 beds operational in FY26: New hospitals in Delhi, Pune, Bangalore, and Kolkata to add 700 beds during FY26. HealthCo+Keimed revenue run-rate of INR 25,000 crore by FY27: Combined entity targeting INR 25,000 crore revenue with 7% EBITDA margin by end of FY27. Hospital EBITDA margin target of 25%+: Existing hospital margins expected to expand to 25%+ before new bed dilution of ~100bps.

Risk read

Key risks include New hospital ramp-up margin dilution — Management expects ~100bps margin dip from new hospitals, with total EBITDA impact of INR 100-150 crore over two years.; International patient recovery uncertainty — Bangladesh patient flow remains below pre-crisis levels; recovery timeline is uncertain despite new markets like Iraq.; Quick commerce competition in pharmacy — Aggressive entry of quick commerce players into prescription medicines could pressure margins and customer acquisition costs..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.