02 Sep , 2026 By : Debdeep Gupta
Sun Pharmaceutical Industries shares edged higher in early trade on September 2, stabilising after a nearly 3 percent fall in the previous session, as brokerages assessed the impact of the drugmaker's Most Favored Nation (MFN) pricing agreement with the US government.
The stock was trading 0.36 percent higher at Rs 1,936 in early deals after falling 2.8 percent on Tuesday. Bernstein and HSBC retained their bullish ratings on Sun Pharma. Analysts highlighted the two-year tariff relief secured under the agreement and saw manageable financial implications from the pricing commitments.
Bernstein maintained its 'Outperform' rating on Sun Pharma with a target price of Rs 2,235 per share, implying an upside of about 16 percent from Tuesday's closing price. The brokerage said 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. Under the agreement, the company will extend MFN pricing to participating Medicaid programmes in the US.
The brokerage also highlighted potential benefits from the 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 Rs 2,120 per share. The brokerage said the MFN agreement effectively removes the tariff overhang on the company for two years.
Its scenario analysis suggests that the agreement would have a limited impact on Sun Pharma's FY29 earnings per share. However, HSBC said it would wait for greater clarity on the terms of the agreement before making further changes to its estimates.
Sun Pharma had announced on September 1 that it had reached an agreement with the US government under which it would extend MFN pricing to state Medicaid programmes and commit to MFN pricing for future innovative medicine launches.
In return, the agreement delays the application of Section 232 tariffs on Sun Pharma's innovative pharmaceutical products for more than two years. Further terms of the agreement remain confidential.
The US is Sun Pharma's largest market for innovative medicines and accounts for around 27 percent of its global revenue. Its global innovative medicines portfolio accounts for about 22 percent of company sales.
Sun Pharma shares are up about 12 percent so far in 2026, compared with an 8 percent decline in the Nifty 50. The drugmaker's market capitalisation stood at just under Rs 4.63 lakh crore.
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