Sunpharma vs Cipla 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.

Cipla delivered a solid Q4 FY25 with revenue of INR 6,730 crore (+9% YoY) and EBITDA margin of 22.8% (+150bps YoY), driven by strong performance across One India (+8% YoY), North America ($221M quarterly revenue), and EMU (+16% YoY). PAT stood at INR 1,222 crore. The company guided FY26 EBITDA margin of 23.5%-24.5%, reflecting confidence despite generic Revlimid exclusivity loss. Key growth drivers include respiratory pipeline (Advair launch in FY26, six respiratory ANDAs filed), peptide launches (two to three in FY26), and Nano Paclitaxel/Nilotinib approvals. One India chronic mix improved to 61.5%. Risk: Generic Revlimid compression could pressure U.S. revenue and margins in coming quarters.

Guidance read

FY26 EBITDA margin guidance of 23.5%-24.5%: Management guided EBITDA margin in the range of 23.5%-24.5% for FY26, reflecting confidence despite Revlimid exclusivity loss. Advair launch expected in FY26: Advair will be commercialized from the U.S. facility, with launch expected in FY26 depending on FDA prioritization. Two to three peptide launches in FY26: Cipla aims to launch two to three peptide assets in FY26, with one expected to be a large asset. U.S. revenue run rate of ~$220 million for Q1 FY26: Management indicated U.S. revenue for the next quarter is expected to be around $220 million, factoring in Revlimid compression.

Risk read

Key risks include Generic Revlimid exclusivity loss — Revlimid exclusivity ends in FY26, which will compress revenue and margins in the U.S. business.; Lanreotide supply normalization uncertainty — While supplies are resuming, the timeline to regain previous market share is uncertain and may take time.; U.S. tariff and regulatory risks — Potential U.S. tariffs on pharma imports and executive orders on pricing could impact the business, though management sees limited near-term impact.; Execution risk on peptide and respiratory pipeline — Delays in approvals or commercial launches of key pipeline assets (peptides, Advair) could affect growth trajectory..

Promise ledger

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