Sun Pharma Edges Higher as Brokerages See Limited Impact from US MFN Pricing Deal

Shares of Sun Pharmaceutical Industries edged higher in early trade on September 2, stabilizing somewhat from yesterday’s near 3 percent loss. The move came as investors assessed the impact of the company's Most Favored Nation (MFN) pricing agreement with the US government.

The stock was 0.36 percent higher at Rs 1,936 in early trade compared to Tuesday's close of 2.8 percent lower. Although there had been some ups and downs for the stock in the past few sessions, both Bernstein and HSBC maintained a positive outlook on the pharma company.

Bernstein continued with its 'Outperform' recommendation on Sun Pharma and kept its target price at Rs 2,235 per share. Based on Tuesday's closing level, the brokerage's target suggests a potential upside of around 16 percent. The firm noted that Sun Pharma was the only Indian company among nine pharmaceutical manufacturers that entered into MFN pricing agreements at the White House.

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According to Bernstein, the arrangement could carry strategic significance for the company as it may support the expansion of Sun Pharma's innovative medicines business, which it estimates at $1.2-1.3 billion. As part of the agreement, the company will offer MFN pricing to participating Medicaid programmes in the United States.

The brokerage also highlighted potential benefits from lower Medicaid net prices. According to Bernstein, lower prices could improve patient access, reduce prior-authorisation hurdles and support wider adoption of biologic medicines.

HSBC also maintained its 'Buy' rating on the stock and retained a target price of Rs 2,120 per share. The brokerage said the agreement effectively removes concerns related to tariffs on the company for the next two years.

Its analysis indicates that the impact on Sun Pharma's FY29 earnings per share is likely to remain modest. However, HSBC added that it would review its projections further once additional details regarding the agreement become available.

On September 1, Sun Pharma disclosed that it had reached an arrangement with the US government under which it would extend MFN pricing to state Medicaid programmes. The company also committed to applying MFN pricing to future launches of innovative medicines.

In exchange, the implementation of Section 232 tariffs on the company's innovative pharmaceutical products has been deferred for more than two years. The company stated that the remaining terms of the agreement are confidential.

The United States remains the largest market for Sun Pharma's innovative medicines portfolio and contributes around 27 percent of the company's global revenue. Innovative medicines account for roughly 22 percent of overall sales.

Sun Pharma shares have gained about 12 percent so far in 2026, while the Nifty 50 has declined 8 percent during the same period. The company's market capitalisation stood at just under Rs 4.63 lakh crore.