Sun Pharma Advanced Research Company Limited has submitted an addendum to its valuation report following clarifications requested by the National Stock Exchange of India Limited regarding the company's Extra-Ordinary General Meeting application. The pharmaceutical research company filed the regulatory disclosure on February 24, 2026, addressing specific queries raised by NSE on February 19, 2026.

Regulatory Background and Timeline

The addendum follows the company's earlier intimation dated January 29, 2026, regarding a corrigendum to the EGM Notice. Subsequently, SPARC submitted an application for in-principle approval under the SEBI (ICDR) Regulations to the stock exchange, which prompted NSE's request for additional clarifications on the valuation methodology.

Key Clarifications in Valuation Report

The addendum, prepared by registered valuer Mr. Jinesh Shah (IBBI Membership Number: IBBI/RV/06/2019/11939), addresses two primary areas of NSE's queries. The first clarification pertains to the scope of information, where unaudited financial statements for the quarter ended September 30, 2025, are now specified as being duly approved by the Board and subjected to limited review by statutory auditors.

DCF Method Exclusion Rationale

The most significant portion of the addendum explains why the Discounted Cash Flow (DCF) method was not employed in the company's valuation. The registered valuer provided detailed reasoning based on the company's unique business characteristics as a clinical-stage biopharmaceutical research and development entity.

Business Model Constraints

SPARC's operations focus predominantly on three key areas that present valuation challenges:

• Pre-clinical research activities
• Clinical trial execution across multiple phases
• Development of novel pharmaceutical technologies

These activities require continuous investment outflows while revenue inflows arise only upon successful late-stage development, out-licensing, or commercialization of product candidates. The valuer noted that drug development inherently carries very low probability of success, making future licensing income, product revenues, or royalty streams contingent and speculative.

Revenue Predictability Issues

The addendum emphasizes that SPARC lacks established or recurring revenue-generating business models, with operations remaining predominantly focused on research and clinical development. Any potential income from R&D outcomes is characterized as inherently uncertain, irregular in timing, and contingent upon scientific progress, regulatory milestones, and external partnering decisions.

Income Approach Limitations

The valuer explained that the Income Approach, including both Price Earnings Capitalization Value (PECV) and DCF methods, requires stable future economic benefits. Since SPARC has incurred persistent operational losses over preceding financial years, there are no sustainable or maintainable earnings to capitalize. The company's management has not furnished financial projections, further supporting the decision to exclude income-based valuation methods.

Document Availability and Compliance

The complete addendum to the valuation report has been made available on the company's website under statutory disclosures for shareholders' meetings. Company Secretary and Compliance Officer Kajal Damania signed the regulatory filing, ensuring compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The submission addresses NSE's concerns while maintaining the original valuation methodology's integrity, providing transparency regarding the specialized nature of clinical-stage biopharmaceutical company valuations and the inherent challenges in applying traditional income-based approaches to such entities.

Sun Pharma Advanced Research Company Limited (SPARC) announced its unaudited standalone and consolidated financial results for the third quarter ended December 31, 2025, showing continued losses amid declining revenue. The Board of Directors approved these results at their meeting held on February 09, 2026.

Financial Performance Overview

The company reported significant financial challenges during the quarter, with both standalone and consolidated operations showing substantial losses.

Nine-Month Performance Analysis

For the nine months ended December 31, 2025, SPARC's financial performance showed mixed results with reduced losses but lower revenue.

Regulatory Compliance and Disclosures

Pursuant to Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company published extracts of its financial results in Financial Express (English Newspaper) all editions and Financial Express (Gujarati Newspaper) Ahmedabad Edition on February 10, 2026. The complete financial results are available on the company's website at https://sparc.life/ and on the stock exchange websites.

Exceptional Items and Regulatory Impact

The company recognized an exceptional item of ₹12.36 crores during Q3 FY26 related to India's new labour codes. The Government of India consolidated 29 existing labour legislations into four unified codes: Code on Wages 2019, Code on Social Security 2020, Industrial Relations Code 2020, and Occupational Safety, Health and Working Conditions Code 2020. These codes became effective from November 21, 2025, introducing changes including uniform wage definitions and impacting employee benefits such as gratuity and leave encashment.

Expense Structure

The company's major expense categories for Q3 FY26 included:

• Employee benefits expense: ₹26.90 crores (standalone)
• Professional charges: ₹15.95 crores (standalone)
• Cost of materials consumed: ₹7.21 crores
• Clinical trial expenses: ₹6.27 crores
• Finance costs: ₹6.78 crores

Recent Regulatory Approval

On February 03, 2026, the United States Food and Drug Administration granted a Rare Pediatric Disease Priority Review Voucher (PRV) associated with the approval of Sezaby®. The PRV is a tradeable voucher that can be redeemed for priority review of subsequent drug applications.

Going Concern Status

Despite incurring cash losses in current and past quarters, the company maintains its going concern status based on a support letter from its promoter group entity. SPARC operates in a single reportable business segment of pharmaceutical research and development.