Sun Pharma Q2FY27: PAT -36% YoY on one-offs, adjusted PAT flat vs 12% revenue growth

Sun Pharma's consolidated (primary) PAT fell 36.4% YoY to ₹1,988.5 Cr (-31.5% QoQ from ₹2,901.2 Cr), even as consolidated revenue grew 11.8% YoY and 5.9% QoQ to ₹16,198.7 Cr. The gap is almost entirely a one-off: the quarter carries a ₹1,268.8 Cr pre-tax exceptional charge — ₹346.2 Cr of Organon acquisition diligence/legal/financing costs and a ₹922.7 Cr settlement of the Taro US antitrust pricing litigation — against a tax credit of ₹95.3 Cr. Stripping that out, management's adjusted net profit was ₹3,162 Cr, up just 1.2% YoY, meaning even on a clean basis profit growth badly lagged the 11.8% revenue growth. Standalone PAT was ₹871.3 Cr with no exceptional items at all, underscoring that both the growth and the one-off hit sit in the overseas/subsidiary layer consolidated into the group numbers. The margin bridge explains the adjusted-profit shortfall: EBITDA margin was 29.3% (₹4,743.9 Cr), down roughly 200 bps from 31.3% a year ago, though up about 180 bps sequentially from 27.5% in Q1FY27. The YoY compression traces to US formulations, where sales fell 8.2% YoY to $455 Mn (27% of consolidated sales) — a continuation of the slowdown flagged after Q1. That weakness was partly offset by India formulations, up 17.3% YoY to ₹5,552.3 Cr (34.5% of sales, Sun Pharma's #1 India market share now at 8.6% per Pharmarack), Global Innovative Medicines up 6.9% YoY to $356 Mn, Emerging Markets up 7.6% to $350 Mn, and RoW up 3.1% to $241 Mn. R&D spend was ₹778.4 Cr, 4.8% of sales — below the 6-7% intensity management had guided to in the prior concall, a shortfall rather than a beat on that specific line. No reliable street/consensus estimate for this specific quarter could be confirmed via search, so vsStreet is unknown rather than assumed. Against the company's own prior guidance (FY27 high single-digit revenue growth, maintained even after Q1's 10.5% beat), this quarter's 11.8% YoY growth keeps running well ahead of that bar. The effective tax rate on pre-exceptional profit works out to about 28.3%, close to the 27.8% guided to hold until the Organon deal closes in Q4FY27 — in line. Corporate activity this quarter ties directly to that deal: the company allotted ₹7,816 Cr of non-convertible debentures on October 26, 2026, part of the financing for the ~$11.75 Bn Organon acquisition, whose integration management says is progressing on plan with regulatory approvals secured in most regions. Management's press release framed the quarter around India/EM/RoW momentum and the US approval of Ilumya for psoriatic arthritis; the framing is accurate on topline drivers but doesn't address the margin compression and R&D undershoot the numbers show. Going into Q3FY27, the quarter sets up three things to track: whether US formulation sales stabilize after an 8.2% YoY decline, whether R&D spend moves back toward the guided 6-7% range from this quarter's 4.8%, and whether the ~28.3% effective tax rate holds near the guided 27.8% as the Organon close approaches in Q4FY27.