Sunpharma vs Apollohosp Q4 FY25

Sun Pharma reported Q4 FY25 consolidated revenue of INR 12,816 crore, up 8.5% YoY, with EBITDA of INR 3,716 crore (+22.4% YoY) and margin expansion of 340 bps to 28.7%. India formulation sales grew 13.6% YoY, while US sales declined 2.5% due to generic erosion. Global specialty sales grew 8.6%, led by ILUMYA (+17% full year). Management guided for mid-to-high single-digit revenue growth in FY26, with an additional $100 million investment in new specialty product launches. R&D spend is expected at 6%-8% of sales. Key risks include US generic pricing pressure, uncertainty around MFN/tariff policies, and potential delays in Leqselvi launch due to ongoing patent litigation.

Guidance read

FY26 revenue growth: mid-to-high single digit: Management expects consolidated top-line growth of mid-to-high single digits for FY2026. Additional $100M investment in specialty launches: Approximately $100 million additional spend in FY26 for commercialization of new specialty products. R&D spend guidance: 6%-8% of sales: FY2026 R&D spend expected to be 6%-8% of sales. Leqselvi launch in Q2 FY26: Leqselvi to be launched in the US in the second quarter of FY2026.

Risk read

Key risks include US generic pricing pressure — US generics declined due to additional competition and pricing pressure, which may continue.; MFN/tariff policy uncertainty — Lack of clarity on MFN and tariff policies could impact US specialty pricing and access.; Leqselvi patent litigation risk — Leqselvi launch may be at risk due to ongoing patent litigation; potential damages if lost.; Tax rate increase — Effective tax rate rose to 19.8% in Q4 from 5.1% last year, expected to inch up further..

Promise ledger

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

Apollo Hospitals delivered a strong Q4 FY25 with consolidated revenue of INR 5,592 crore (+13% YoY) and PAT of INR 390 crore (+54% YoY). Healthcare services revenue grew 10% to INR 2,822 crore, impacted by ~2% from Bangladesh patient flow disruptions. Occupancy was 67% (metro 70%), ARPOB rose 7% to INR 63,569. Apollo HealthCo revenue grew 17% to INR 2,376 crore, with digital losses narrowing to INR 80 crore (vs INR 111 crore last year). AHLL EBITDA grew 32% to INR 47 crore. Management guided for low-to-mid teens organic hospital growth in FY26, with new bed additions (4,300 beds over 3-4 years) starting to contribute meaningfully from FY27. The digital business targets cash break-even between Q3-Q4 FY26. Key risks include continued Bangladesh headwinds in Q1 FY26 and margin dilution from new hospital ramp-ups.

Guidance read

Healthcare services low-to-mid teens organic growth in FY26: Management expects organic revenue growth of low-to-mid teens for healthcare services in FY26, with new hospitals contributing from FY27. Digital business cash break-even by Q3-Q4 FY26: Apollo 24/7 is on track to achieve cash break-even between Q3 and Q4 of FY26, driven by cost reduction and revenue growth. HealthCo combined revenue target of INR 24,000-25,000 crore by FY27: Apollo HealthCo (including Keimed) targets revenue of INR 24,000 crore in FY27, with exit run rate crossing INR 25,000 crore. HealthCo blended EBITDA margin of 7%+ by FY27: Blended EBITDA margin for HealthCo (including Keimed) is expected to exceed 7% by FY27, driven by digital break-even and margin expansion.

Risk read

Key risks include Bangladesh patient flow disruption — Continued impact from reduced Bangladesh patient inflows, expected to persist through Q1 FY26, affecting hospital revenue and margins.; Margin dilution from new hospital ramp-up — New hospitals in Gurgaon, Pune, Kolkata, and Hyderabad will incur initial losses, potentially compressing healthcare services margins by ~140 bps in FY26.; Quick commerce competition in pharmacy — Rapid delivery platforms (10-minute) are gaining share in OTC/FMCG, though Apollo's 19-minute proposition and RX focus mitigate impact.; Keimed merger integration risks — The Keimed merger process is expected to take 15 months; integration challenges could delay synergy realization..

Promise ledger

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