Sun Pharma shares edged higher by 0.36% to ₹1,936 in early trade on September 2, recovering from the previous session's nearly 3% decline. According to Moneycontrol, the stock was trading at ₹1,936 after falling 2.8% on Tuesday, as brokerages assessed the impact of the drugmaker's Most Favoured Nation (MFN) pricing agreement with the US government. Bernstein and HSBC retained their bullish ratings on Sun Pharma, with analysts highlighting the two-year tariff relief secured under the agreement and seeing manageable financial implications from the pricing commitments.
Bernstein maintained its 'Outperform' rating on Sun Pharma with a target price of ₹2,235 per share, implying an upside of about 16% from Tuesday's closing price. As reported by Moneycontrol, the brokerage noted that Sun Pharma was the only Indian company among nine drugmakers that signed MFN pricing agreements at the White House. Bernstein sees the deal as strategically important as it could potentially expand Sun Pharma's $1.2-1.3 billion innovative medicines franchise. The brokerage highlighted potential benefits from lower Medicaid net prices, saying they could improve patient access, reduce prior-authorisation barriers and support greater adoption of biologic medicines.
HSBC maintained its 'Buy' rating on Sun Pharma with a target price of ₹2,120 per share. According to Moneycontrol, the brokerage said the MFN agreement effectively removes the tariff overhang on the company for two years. HSBC's scenario analysis suggests that the agreement would have a limited impact on Sun Pharma's FY29 earnings per share. However, the brokerage said it would wait for greater clarity on the terms of the agreement before making further changes to its estimates.
ICICI Securities highlighted that the US government will delay a potential Section 232 tariff investigation on Sun's innovative pharmaceutical products for over two years under the MFN agreement. As reported by NDTV Profit, the brokerage noted that the US accounts for ~70% of Sun's innovative sales ($1 billion in FY26), and four out of its eight key innovative brands are also sold in markets outside the US. ICICI Securities estimates that Sun Pharma's exposure to Medicaid programmes is likely less than 5%, which may limit the impact of direct price cuts. The brokerage also noted that while Sun Pharma's specialty portfolio is now safeguarded from tariffs, the same safeguard must be extended to Organon post-acquisition.
For Sun Pharma, the US represents a critical market with 27% of its global revenue generated from the region, making it the company's largest market for innovative medicines. As reported by Mint, "The United States is a key area of investment and expansion for Sun Pharma across clinical development, sales and marketing, and both API and finished products manufacturing," said Rick Ascroft, North America CEO, Sun Pharma, who represented the company at the White House. The company has been expanding its footprint in the region, with its global innovative medicines portfolio spanning dermatology, ophthalmology and onco-dermatology, now accounting for about 22% of company sales. The company's exposure to the US is also set to increase following its definitive agreement earlier this year to acquire Organon & Co at an enterprise value of $11.75 billion. According to The Times of India, analysts said sales of Sun Pharma's innovative drugs in US are around $1 billion, and are expected to increase to about $3 billion, following the Organon acquisition. Despite Tuesday's decline, Sun Pharma shares have gained about 12% so far in 2026, substantially outperforming the Nifty 50, which is down nearly 8% over the same period. The drugmaker had a market capitalisation of more than ₹4.63 lakh crore based on Monday's closing price.
