Sun pharmaceutical has received a Buy rating from Jefferies with a target price of ₹2,100 per share, indicating a potential upside of 30.27% from the previous day's close price of ₹1,612. The recommendation comes amid the company's proposed acquisition of Organon, valued between $10-14 billion, which would represent Sun Pharma's largest deal to date.

Jefferies' Investment Thesis

Jefferies' positive outlook centers on the strategic benefits expected from the Organon acquisition. The deal would significantly expand Sun Pharma's global presence, diversify its therapy portfolio, and enhance its manufacturing footprint while providing entry into the biosimilars segment.

Acquisition Risks and Challenges

Despite the potential benefits, Jefferies highlighted several concerns regarding the Organon acquisition. The deal does not meaningfully improve Sun Pharma's new chemical entity pipeline or R&D capabilities. Additionally, Organon is currently operating under interim management following its CEO's resignation in October 2025, which introduces execution risks. The acquisition would result in high leverage for the combined entity, potentially limiting future upside expectations.

Strong Domestic Performance

Sun Pharma's India formulations business delivered robust results in Q2 FY26, demonstrating the company's strong domestic market position.

The company maintained its leadership position with prescription volumes ranking #1 across 13 doctor categories. Growth was primarily driven by higher volumes and new product launches, contrasting with the broader market's price-led growth.

Mixed U.S. Business Performance

The U.S. operations showed mixed results during the quarter, with total sales reaching $496 million, representing a 4.10% decline year-over-year. The segment contributed approximately 30% to consolidated revenue. However, the innovative medicines portfolio continued to grow, led by products including ILUMYA, CEQUA, and ODOMZO. The company launched three new generic products in the U.S. during Q2 FY26 to support future growth.

Financial Performance Overview

Sun Pharma demonstrated solid financial performance in Q2 FY26, with both revenue and profitability showing positive growth.

The company has achieved impressive long-term growth with revenue and net profit growing at a CAGR of 10.80% and 47.90% respectively over the last three years, reflecting strong operational performance and strategic execution.

Global brokerage firm Jefferies has maintained its 'Buy' rating on sun pharmaceutical with a target price of ₹2,100.00, signaling continued confidence in the pharmaceutical major's investment prospects.

Analyst Recommendation Details

The maintained 'Buy' rating from Jefferies indicates the brokerage's positive outlook on Sun Pharmaceutical Industries' business fundamentals and market position. The target price of ₹2,100.00 suggests potential upside for investors considering the stock.

Investment Outlook

Jefferies' decision to maintain its 'Buy' recommendation reflects the brokerage's assessment of Sun Pharmaceutical Industries' current market position and future growth potential. The target price provides investors with a benchmark for the stock's expected performance based on the analyst's evaluation of various business and market factors.

The maintained rating suggests that despite market conditions and sector dynamics, Jefferies continues to view Sun Pharmaceutical Industries as an attractive investment opportunity for portfolio consideration.