Sunpharma vs Apollohosp Q2 FY25

Sun Pharma delivered a strong Q2 FY25 with consolidated sales of INR 13,264 crore, up 10.5% YoY, driven by US specialty growth (+20.3% to $517M) and India formulation growth (+11%). EBITDA margin expanded 350 bps YoY to 29.6%, aided by favorable product mix and lower material costs. PAT grew 28% YoY to INR 3,040 crore. The US specialty portfolio (Ilumya, Winlevi, Cequa) continues to perform well, while the India business gained market share to 8.1%. R&D spend guidance was revised down to 7-8% of sales due to clinical trial delays. Key risks include the binary outcome of Leqselvi patent litigation and potential margin pressure from higher selling expenses.

Guidance read

R&D spend to be 7-8% of sales for FY25: R&D spend for FY25 is expected to be in the range of 7-8% of sales, down from earlier guidance of 8-10%, due to delays in clinical studies. Leqselvi launch readiness within weeks of favorable judgment: Management stated they would be ready to launch Leqselvi within a couple of weeks post a favorable court ruling on the patent litigation. Ilumya PsA Phase III data expected H2 CY2025: Phase III data for Ilumya in psoriatic arthritis is expected in the second half of calendar year 2025, with launch shortly after approval.

Risk read

Key risks include Leqselvi patent litigation binary outcome — The Leqselvi launch depends on a favorable court ruling on the '335 patent; an unfavorable outcome could delay launch until patent expiry in Dec 2026.; R&D spend may remain below guidance if trials delay further — Management acknowledged that further delays in clinical trials could keep R&D spend below the revised 7-8% guidance.; Higher selling expenses pressuring margins — Other expenses rose significantly due to higher selling and distribution costs in US and EM, which could pressure margins if not offset by revenue growth.; Japan price cuts impacting ROW revenues — Price cuts in Japan are expected to continue pressuring ROW revenues for the next few quarters, as mentioned by management..

Promise ledger

Of 2 tracked promises, management 0 met, 0 close, 2 missed.

Apollo Hospitals reported a strong Q2 FY25 with consolidated revenue of INR 5,589 crore (+15% YoY) and EBITDA of INR 816 crore (+30% YoY). PAT surged 63% YoY to INR 379 crore, driven by broad-based volume growth and margin improvement. Healthcare services revenue grew 14% to INR 2,903 crore, with occupancy rising to 73% (vs 68% last year). Apollo HealthCo turned profitable for the first time (PAT INR 19 crore). Management guided for 1,400 new beds in FY26, with phased commissioning to protect margins. The 24/7 platform is pivoting to sustainable growth, targeting breakeven in 5-6 quarters. Risk: Bangladesh patient flow disruption and quick commerce competition may pressure near-term ARPOB and GMV growth.

Guidance read

1,400 new beds in FY26 with phased operationalization: Six facilities in key metros will be commissioned in FY26; half of the beds operationalized in FY26, rest in FY27 to protect margins. Apollo HealthCo online segment breakeven in 5-6 quarters: The online 24/7 platform is expected to achieve breakeven by Q2 FY26, with sustainable GMV growth and reduced marketing spend. Combined pharmacy revenue target of INR 25,000 crore in 3 years: Including Keimed, the pharmacy platform targets INR 25,000 crore revenue with 7-8% EBITDA margin. Healthcare services margin expansion of 50-60 bps in FY25: Management expects 50-60 bps margin expansion for the full year, lower than initial 100-150 bps due to Bangladesh headwinds.

Risk read

Key risks include Bangladesh patient flow disruption — International patient revenue from Bangladesh fell 27% in H1, impacting Tamil Nadu volumes. Recovery expected but uncertain.; Quick commerce competition pressuring 24/7 GMV — Quick commerce players are impacting non-Rx sales, delaying unit economics improvement. Management is rolling out 19-min delivery to counter.; Insurance payer pushback on pricing — Health insurers facing high claims ratios may exert pressure on hospital pricing. Management believes network strength mitigates this.; New bed commissioning may pressure margins — 1,400 new beds in FY26 could drag EBITDA margins by 1-1.2% during ramp-up, though management expects 12-14 month breakeven..

Promise ledger

Scorecard data is being built as historical quarters are processed.