SUN PHARMACEUTICAL INDUS (NSE: SUNPHARMA) Q3 2026 Earnings Call dated Jan. 31, 2026
Corporate Participants:
Abhishek Sharma — Vice President, Head of Investor Relations & Strategic Projects
Jayashree Satagopan — Chief Financial Officer
Kirti Ganorkar — Managing Director
Richard Ascroft — CEO, North America
Aalok Shanghvi — Chief Operating Officer
Dilip Shanghvi — Chairman
Analysts:
Rishi Parekh — Analyst
Tushar Manudhane — Analyst
Damayanti Kerai — Analyst
Neha Manpuria — Analyst
Bino Pathiparampil — Analyst
Girish Bakhru — Analyst
Vishal Manchanda — Analyst
Kunal Dhamesha — Analyst
Gautam — Analyst
Shashank Krishnakumar — Analyst
Vivek Agrawal — Analyst
Foram Parek — Analyst
Abdulkader Puranwala — Analyst
Presentation:
operator
Ladies and gentlemen, Good day and welcome To Sun Pharma’s Q3FY26 financial results conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing Star then zero on your touchtone phone. I now hand the conference over to Dr. Abhishek Sharma, Vice President and Head of Investor Relations and Strategic Projects for his opening remarks. Thank you. And over to you sir.
Abhishek Sharma — Vice President, Head of Investor Relations & Strategic Projects
Thank you. Good evening and a warm welcome to our third quarter FY26 earnings call. I welcome you all especially to have. Joined us on a Saturday. I’m Abhishek from the Sun Pharma Investor Relations team. We hope you have received the Q3. Financials and the press release that was sent out earlier in the day. These are also available on our website. We have with us Mr. Dilip Shangvi, Chairman, Mr. Keerti Ganorkar, Managing Director, Mr. Alok Shangvi, Chief Operating Officer, Ms. Jaishree Satagopan, CFO and Mr. Richard Ashcroft, CEO North America. Today the team will provide an update on financial performance and business highlights for the quarter pipeline update and respond to any questions that you may have. We will refer to the consolidated financials for management comments. The call recording and call transcript will. Also be put up on our website shortly. Just to add, in recent weeks there. Has been speculation in media regarding Sun’s M and A interest in certain companies. We have clarified to Exchanges that the news is speculative in nature and we. Will not be taking any questions in today’s call regarding the news article and their subject. The discussion today might include certain forward. Looking statements and these must be viewed. In conjunction with the risks that our business faces. You are requested to ask two questions. In the initial round. I also request all of you to kindly send in your questions that may remain unanswered today. I will now hand over the call to our CFO Ms. Jaishree Sadhgopan.
Jayashree Satagopan — Chief Financial Officer
Good evening all. Welcome and thank you for joining us for this earnings call. After the announcement of financial Results for the third quarter of FY 2026, our Q3 financials are already with you. As usual we will look at key consolidated financials of the company. During the third quarter of FY26 we recorded a sales of Rupees 1:54,691 million registering a growth of 15.1% vis a vis Q3 FY25. Besides the underlying business growth, we also had a milestone income of US$55 Million in Rest of the World in the third quarter. X Milestone overall sales growth was 14.7%.
In the corresponding quarter of FY25, sun had received a milestone payment of US$45 Million. Gross margin during the quarter was at 81, percentage higher than the same period last year largely on account of better product mix. EBITDA for the quarter was Rupees 49,485 Million, an increase of 23.4% over Q3 last year. EBITDA margin came in at 31.9% higher both on a year on year and a quarter on quarter basis excluding the impact of milestone income, favorable forex impact and other operating revenues. EBITDA margins for the company improved mostly on account of better product mix during the quarter.
An exceptional charge of Rupees 4,895 Million was taken primarily on account of wage code gratuity as per IPI guidelines and additional provision for GSMDL final settlement. Reported net profit after tax for Q3FY26 was rupees 33,688 million, up by 16% over Q3 last year. Adjusted net profit for the quarter was rupees 35,367 million, up 9.9%. EPS for the quarter was rupees 14 per share. Effective tax rate for the quarter was 24.3% vis a vis 14.7% in the third quarter of FY25 and 24.7% in Q2FY26 forex gain during the quarter was rupees15.39 million. Our balance sheet continues to be strong with a net cash of 3.2 billion at the consolidated level.
Now we will discuss the nine months performance. For the first nine months of FY26 sales was at Rupees 4.36,604 million registering a growth of 11.3%. Gross margin was at 80% for the first nine months. EBITDA came in at Rupees 1.37,772 million, registering a growth of 19.2% with a resulting EBITDA margin of 31.4%. Adjusted net profit for the nine months was Rupees 96,508 million, up by 6.1%. The board has declared an interim dividend of Rupees 11 per share for the year FY26 against Rupees 10.5 per share interim dividend for the previous year. I will now hand over the call to Keerti who will share the performance of our global innovative medicines business the India Business.
Kirti Ganorkar — Managing Director
Thank you Jaishree. I shall first provide you an update on Global innovative medicine business in Q3FY26 our global innovative medicine sales were up 14.3% to reach US$423 Millionx milestone income. Our global innovative medicine growth came in at 13.2% an additional point on the milestone income. While sun has had a milestone income in the last year, it may or may not recur in the future. Hence you may treat it is one off income. Our performance in innovative medicine business continues to be driven by mix of growth in US and ex US markets. Recently we launched Unlocks IT in the US during the quarter gone by we have also introduced Illumia in India.
Early feedback for both the launches has been quite encouraging. Coming to India business for Q3 sales formulation in India where rupees 49,986 million recording a growth of 16.2% or Q3 last year, India formulation sales accounted for 32.3% of total consolidated sales for the quarter, Sun Pharma is ranked number one and holds 8.4% market share in the over 2,407 billion Indian pharmaceutical market as per Pharmarac mad December 2025. Corresponding market share for the previous period was 8.1% for the quarter ending December 25. We grew higher than the IPM and we had done well across all major represented therapy areas.
The sales growth continues to be led by higher contribution from volume and new product introduction as compared to the overall market. Our volume growth of 6.3% for the quarter beat IPM volume growth which is at 1.2% as per SMSRC July October 25 report. We continue to be the number one brand based on the prescription volumes. Sun Pharma is also ranked number one by prescription with 14 different doctor categories for Q3FY26. The company launched 12 new products in India as the leaders in diabetes and metabolic segment. We are looking forward to expand our portfolio with the launch of Semaglutide.
Upon the expiry of Semaglutide patents in India, Sun’s plans to be in the market on day one of a generic launch. We have already received the regulator’s approval for both the indication of chronic weight management as well as treatment of type 2 diabetes under the brand name Noveltreat and Sema Trinity respectively. We are well positioned here with an expected launch across both indications as well as all the strength presenting a comprehensive solution to the physicians as well as patients. Our brands will be made available in easy to use format and we have ensured sufficient supplies to meet the demand in India.
I will now hand over the call to Rick for the update on the US.
Richard Ascroft — CEO, North America
Thank you Kirti and good evening. Let me share the performance highlights of our U.S. business. Our overall U.S. business was marginally up by 0.6% to reach $477 million for the quarter. Growth in innovative medicines was offset by lower sales in the generic business due to additional competition in certain products. The U.S. accounted for 27.5% of consolidated sales for the quarter for Q3. We launched three new generic products in the U.S. as Keerti mentioned recently, we’ve also launched Naloxone in the US for the treatment of advanced cutaneous squamous cell carcinoma. Our early launch efforts have been focused on education and awareness of healthcare professionals. We are also in active discussions with Health Systems to ensure wide access for the product. Our initial interactions have been positive. We have completed initial stocking and had. Our first orders from distributors. I’d also like to give a quick word on Luxelvi. The initial response from physicians has been encouraging. Physicians are reporting early signs of hair. Regrowth in patients which mirrors our clinical data, including in some patients who have previously failed other JAK inhibitors. I will now hand over the call to ALOK for updates on our other businesses. ALOK.
Aalok Shanghvi — Chief Operating Officer
Thank you Rick and good evening to everybody on the call. I will provide an update on the performance highlights of our other businesses. Our formulations revenues in emerging markets were US dollars 337 million, up by 21.6%. Over Q3 last year. The underlying growth in constant currency terms was 13%. In emerging markets we have seen broad based growth in the generic and innovative medicine business. Emerging markets accounted for 19.4% of total consolidated revenue for Q3. Among the larger markets, Romania, South Africa and Brazil have done well in local currency terms. Formulation revenues in rest of the world were US$296million, up 14.5% over Q3. FY25 we have seen growth both in the generic and innovative medicine business. ROW the rest of the world markets accounted for approximately 17.1% of consolidated revenue. I will now hand over to Mr. Dilip Sanghvi for updates on RD.
Dilip Shanghvi — Chairman
Thank you. Aloh Let me take you through our R and D initiatives and activities. We continue to invest in building a R and D pipeline for both the global generics and the innovative medicine business. Consolidated investments made towards R and D for Q3FY26 stand at Rupees 8928 million or 5.8% of sales. Innovative R&D accounted for 30.5% of our total R&D spend stands at 7.2% of global innovative medicine sales for the quarter. During the quarter we filed SBLA for Illumia with the US FDA in the indication of psoriatic arthritis. FDA approved label updates on Unlox IT based on longer term data that demonstrated improved clinical outcomes in advanced cutaneous squamous cell carcinoma.
We’ve also initiated global phase 2 trials of GL0034 in the indication of type 2 diabetes. FDA has also updated Illumia label recently with additional efficacy data in treatment of psoriasis of the nail.
Abhishek Sharma — Vice President, Head of Investor Relations & Strategic Projects
Operator we can open for Q and A?
Questions and Answers:
operator
Sure. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press Star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. First question is from Rishi Parekh from JP Morgan. Please go ahead.
Rishi Parekh
Good morning and good evening I guess and thank you so much for taking my question. Now I appreciate you’re not taking questions on what’s speculative out there, but for many of us that are new to Sun Pharma, I was just hoping that you could walk us through your M and A strategy and what you’re hoping to target or achieve with the strategy. Are you looking at tuck ins? Are you looking to add biosimilars? Are you looking to expand your geographic presence and how important is North America in the strategy?
Dilip Shanghvi
So I think almost for all of those issues we’ve indicated responses to analysts on this call in the past. I think US continues to be an important part part of our focus specifically for the innovative medicines and not only US, but we’ve interest in selling innovative medicines globally for emerging markets. We’re looking at what you call tuck ins or smaller acquisitions which we can look at integrating with our existing business to gain get scale in the emerging markets and we have also consistently indicated that we want to remain disciplined about acquisition. Our focus is on finding a way to grow our business organically at a rate so that we continue to be an attractive investment opportunity for shareholders.
We would look at a acquisition only if we think that it can help us in terms of strengthening our long term strategic capability.
Rishi Parekh
And then can you also Talk us through the size of the types of. Acquisitions you’re looking at.
Dilip Shanghvi
Unless and until. So I think we’ve indicated in the past that. We need. To be confident that whatever acquisition we make, we should be able to manage effectively without our diluting focus on our own growth. At the same point of time, I think we also indicated that for acquisition, if it is necessary, we are comfortable raising debt. Thank you.
Rishi Parekh
Thank you.
operator
Thank you. The next question is from Tushar Manodane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane
Thanks for the opportunity sir. On the innovative medicine sales exof milestone payment, the growth has been bit soft compared to earlier quarters. If you could elaborate on that. That’s my first question.
Kirti Ganorkar
Yeah, I will answer your question. As we have called out in your Q3 FY20 certain one time sales to our partner and that has given Q3 25 high base and that is one reason for the growth looking lower in H1. Our specialty should continue to do well. It is difficult for us to comment quarter to quarter. My view is always you look at the business on annualized basis rather than looking at quarter to quarter basis.
Tushar Manudhane
And so secondly R D spend on the innovative portfolio is both as a percentage of total R D as well as absolute amount has been reducing for past 2 3/4. If you could also explain that.
Dilip Shanghvi
No, I think it’s all linked with commencing clinical trials. As we are commencing new clinical trial including the one for GL34 we should some increase in the rent spend and next quarter we will guide around disarrant next year. That will expected R D spend for next year.
Tushar Manudhane
Got it. And just lastly if I may, US sales tax of revlimid has the portfolio grown or it has still been stable? If you could just throw some light on that.
Richard Ascroft
Is the question specifically related to generics?
Tushar Manudhane
Yes.
Richard Ascroft
Ex linolidomide. The generics business is slightly down in the US.
Tushar Manudhane
So is this to do with price erosion or lack of launches? If you could also explain that.
Richard Ascroft
It’S really due to specific competition for certain products.
Tushar Manudhane
So how do you see this improving going forward?
Richard Ascroft
I think overall for the US we see the innovative medicines continuing to grow. And the generic business will start to. Recover once we are in manufacturing compliance for a number of our sites in order to launch new products.
Tushar Manudhane
Thanks a lot.
operator
Thank you. The next question is from Damian Tke Rai from hsbc. Please go ahead.
Damayanti Kerai
Hi, good evening and thank you for the opportunity. My first question is on gross margin. Just want to understand it better. In your opening remarks you mentioned better mix better led to such strong gross margin. So if you can just explain like. What are the key drivers to sustain such high gross margin as we understand now, rev limit benefit is over for you. So if some additional color to explain the very strong gross margin performance.
Jayashree Satagopan
Thanks for your question Kavayanthi. As you know, we don’t specifically guide on product margin. Having said that better mix of products, both in terms of branded products and our innovative medicines has given an uptick compared to the gross margin in the previous year.
Damayanti Kerai
Okay, and you think this level of margins will sustain or how do you see margins trending ahead?
Jayashree Satagopan
As I was just mentioning, we normally. Do not guide on margins. Our endeavor is to see how we. Sustain and respond to our potential.
Damayanti Kerai
Okay, sure. My second question is on trend on the new launches where you indicated incremental spend out 100 million or so. So in terms of spend, where do you, you know how much, how much of that is already covered and how much is yet to come and where are the major spend happening?
Kirti Ganorkar
So Rick, maybe you want to.
Richard Ascroft
Yeah, I’m happy to address that. So this spend is really occurring on the Luxelbe and Locksit launches was fairly evenly split. We do see that spend increasing now in the latter part of the fiscal year, particularly as we’ve just launched. Just launched unlocks it. We do expect this to be kind. Of part of our core expenses though going forward.
Damayanti Kerai
Okay. So next year as well we see we expect elevated spend on these new launches as we build up the market use, etc.
Richard Ascroft
Yeah, next year it’ll just be part. Of our core operating opex to support these and the rest of our innovative medicines business.
Damayanti Kerai
Okay. And very recent launch. But any color on how you’re proceeding with your decision with the insurance partners, etc, and when do you expect those deans to sign? Like when you have the partner healthcare partners onboarded?
Dilip Shanghvi
Is the question related to unlocks it?
Damayanti Kerai
Yes.
Richard Ascroft
Sure. So the we’re having active discussions with physicians as you would expect given we’re just a few weeks outside of launch. From a distribution perspective. The distribution network is in place. As I had shared, those agreements are in place. The product has been stocked as well as the agreements with downstream customers. The other important discussions are with health systems. As this is an oncology product. A lot of the prescriptions will come from health systems. But we have been in active discussions. With health systems since before launch. We have been in touch with the top 50 cancer centers within the US. And all of those discussions have been progressing positively for the first few weeks. Very pleased with what we’ve seen so far. The message is resonating in terms of. The balance that this product provides in terms of efficacy and safety. It’s something that clinicians have been looking for. And again, within the health systems, the. Discussions from a formulary perspective have been progressing positively.
Damayanti Kerai
Thank you. I’ll get back in the queue.
Richard Ascroft
Thank you.
operator
Thank you. The next question is from Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria
Yeah, thanks for taking my question. My first question is on the India business. Given the strong performance that we have seen and the upcoming launch of SEMA that you indicated, should we expect this growth rate to improve further as we look, you know, look through the next few quarters, particularly as we add sema. And just a related question on that. Would we need to add any more sales force or, you know, any plans to expand the salesforce in India generally with for Sama or otherwise, given the strong growth that we’ve seen?
Kirti Ganorkar
As I think neha, you’ll appreciate that it’s very difficult for us to predict what will be the future growth and. How we will grow. So we will not comment on that. Coming to your question on GLP1. Yeah, we will add some few field force for the launch of the product. And that’s like the way we do the business in India.
Neha Manpuria
And this hasn’t been done as yet.
Kirti Ganorkar
Yeah, we are preparing for the launch as I said in my readout. So some of this thing has already been done.
Neha Manpuria
All right. Okay, got it. My second question is on the RND spend for generics. If I were to strip out the specialty number that we mentioned that seemed to have, you know, increased quite a bit. So if I could give us some color, you know, in terms of incrementally, you know, where are we looking at spend, you know, and since historically we’ve kept biosimilars outside any plan in sort of looking at biosimilars, again with the change, given the change in regulation.
Dilip Shanghvi
Yeah, I did not understand what is the question.
Neha Manpuria
If you, if I look at the, you know, X specialty RD spend, right. Then after stripping out the R and. D speciality, R and D that you. Give, the generic spend seems to have increased quite a bit. So, you know, could you give us some color on where we are spending on genomics specifically and also our thoughts on, you know, biosimilars, how should we. Look at that opportunity for Sun Pharma. Particularly given we haven’t done too much in the past?
Dilip Shanghvi
So no, I think we are giving some split between the generic and the specialty. But beyond that, within generic where we spend the money is not something that we give at a granular level. We also recognize that we’re not only talking to investors, but we’re also talking potentially to competitors. So generally we avoid sharing commercially sensitive information on this course.
Neha Manpuria
Understood. And on bioconversion has a view there changed in terms of looking at that opportunity overall.
Dilip Shanghvi
So we I think last time also I indicated so we are evaluating relooking at because we look at comprehensively including setting up manufacturing investment, overall cost of development and the time for the investment to produce any kind of meaningful return. So we are evaluating everything to take a decision.
Neha Manpuria
I’m sorry, one last question on unlock it. You know, how are we thinking about positioning this product versus, you know, rpm? Would it be the warehousing patients that you would look at first or the new patients that come in?
Dilip Shanghvi
Rick, maybe you can respond.
Richard Ascroft
Yeah, I think the position of Nloxit. In the market is very clear and very crisp. What it really offers is balance between efficacy and tolerability. So Enloxa works three ways. It restores adaptive immunity, which is by. Binding to the PD L1. It engages the innate immune system based. On its active SC domain that activates natural killer cells. And unlike the existing product, it preserves PD L2 signaling. And the reason that’s important is that’s. The pathway through which immune mediated adverse events are typically anticipated. So that’s really the positioning of naloxone in the marketplace. And as I said, that’s been resonating with clinicians.
Neha Manpuria
And if you think this would be more important in getting new patients on board or could we initially go after be patients that have used existing products and haven’t worked for them.
Richard Ascroft
We would mostly anticipate new patients.
Neha Manpuria
Oh, got it. Thank you so much.
operator
Thank you. Next question is from Binu Patibarampal from Elara Capital. Please go ahead.
Bino Pathiparampil
Hi, good evening and good morning. The first question is sort of a follow up from earlier questions. Just wanted to know if there is. Any Lenalidomide contribution at all in Q3 or was it completely over in Q2?
Richard Ascroft
Quite small in Q3 but there was a negligible contribution.
Bino Pathiparampil
Got it. Second, on semaglutide, are you also planning for launches in some other emerging markets around the time you will launch in India?
Kirti Ganorkar
Now what I said about the launch in India, only other markets we are not guiding. What is our launch plan?
Bino Pathiparampil
Understood. And finally a question on GL double O34. I believe it is in phase two in diabetes. When can we expect some sort of data there?
Dilip Shanghvi
What was that
Bino Pathiparampil
Gl double three four in diabetes phase two. I think.
Dilip Shanghvi
We are publishing phase 2a. Data in certain scientific conferences, both for diabetes as well as for Nash over next few months. But the current phase 2b study, which has started, that should possibly get over within maybe 12 to 18 months.
Bino Pathiparampil
Okay, so any further data is 18 months. Okay, got it. Thank you.
Dilip Shanghvi
Yeah, yeah, thank you.
operator
Thank you. Next question is from Girish Bakru from aubimed. Please go ahead.
Girish Bakhru
Yeah, thanks for taking my question. Just questions on us again regarding two products. First lxelvi. My understanding is the product requires a. Genetic testing before you put the patient on. Can you talk about that? Isn’t that a significant deterrent?
Richard Ascroft
Yes. Well, first I think it’s important to. Point out for all the JAK inhibitors, there’s a whole battery of testing that. Needs to take place. So that’s similar across all the products. Lexelvia is a bit unique in that we do have a specific testing for how the drug is metabolized. What’s interesting about that is a lot. Of drugs are metabolized through that system. So it’s good for patients to understand that. So there’s some benefits of actually knowing. That as part of the test process. But you’re correct, that is one of. The steps associated with starting patients on Lexelvi.
Girish Bakhru
And can I ask, Richard, are there. Enough centers who are doing this testing? And if you can also throw. Who’s covering the cost of the test? Is it the patient or is it the insurance company?
Richard Ascroft
We’re actually covering the cost of the test. So we’re working with the leading providers. There are several big providers of testing. Within the United States and we are working with them to provide the test. And we do so free of charge to the patient.
Girish Bakhru
Understood. And just while we’re on this market. I mean, Renvoc, of course, is being talked about as a new entrant potentially soon. I mean, I was looking at the data. Data of Frinvoc is pretty solid and its dosing is also better than like survey. So how do you, how do you see that competition coming in this market? And of course, there are whole set. Of new drugs also probably being targeted in alopecia.
Richard Ascroft
Yeah, I don’t know if I would agree with the comment about the, the dosing being better. I think what I would say is. You know, first of all, this remains. A category where there’s opportunity for more diagnosis. So the more products that are available. Is a good thing because it’s getting patients choices and it’s going to allow the market to continue to grow, particularly this severe market where it can be. Challenging for physicians to differentiate those patients. So having additional competition is a good. Thing because it will help with that education. The other thing we know, and we’re seeing with Luxelvi as well, is just because a patient tries that doesn’t mean they’re not going to respond to others. In fact, that’s exactly what we’re hearing from clinicians. We’re having patients that are starting Luxelvi that have actually failed the two other. Approved JAK inhibitors and actually are now responding on Lexalvi.
Girish Bakhru
Understood. And second question was on Loxit. I heard your comment earlier that this. Primary market is basically new patients. So I mean, you are not really targeting patients who have failed Keytruda or Liptale, is that correct?
Richard Ascroft
There could be patients that are having. Trouble tolerating Keytruda and Lithio that could move to unlox it. But in general our assumption has been. And our strategy has been more focused on new patients.
Girish Bakhru
But wouldn’t that market be smaller? Like given the advanced carcinoma patients would be difficult to find?
Richard Ascroft
Yes, I mean there are, it’s smaller than the overall population, but there’s a meaningful population of patients that start immunotherapy where they need to go on one of these therapies.
Girish Bakhru
And just lastly, any thoughts on new indications that you’re pursuing for Lexel or Unlox it right now or is it too early?
Richard Ascroft
We are in active discussions about LCM for both products.
Girish Bakhru
Thank you so much.
operator
Thank you. Next question is from Vishal Manchanda from Systematics. Please go ahead.
Vishal Manchanda
Hi, good evening and thanks for the opportunity. A question on your pending ANDAs and NDAs. So you have 116 ANDs pending and about 14 NDAs pending approval. Would you be able to share how many of these are from sites that are impacted by oai?
Aalok Shanghvi
So we don’t specifically disclose which ANDIs. Are fired from which site.
Vishal Manchanda
In the sense like just a percentage of the spending ands or nds that would be filed from the affected sites.
Aalok Shanghvi
Like I said, we don’t disclose that.
Vishal Manchanda
Right. Okay. And if you could share some nature on nature of the NDA filings that are pending approval in the sense whether these are ready to use injectables or sprinkle powders that you have been kind of trying to build over time. So would majority of these would be kind of ready to use injectables and dysphagia related products?
Abhishek Sharma
No, we haven’t given details about our. NDA Filings in terms of the nature. Yeah.
Vishal Manchanda
Okay. And just one final one. Will we see, do you expect to see further decline in US generic sales in Q4?
Richard Ascroft
I think I don’t believe we provide forward looking guidance.
Dilip Shanghvi
I mean we, it’s included in our overall guidance.
Vishal Manchanda
Right, right. And. And if you could just share with between Unlocks and Lexelvi which, which one would become, which one would scale up faster over the next two years. Any sense there?
Richard Ascroft
We typically don’t provide product specific guidance.
Vishal Manchanda
Thanks.
Dilip Shanghvi
Thank you.
operator
Thank you. Next question is from Kunal Damesha from Macquarie. Please go ahead.
Kunal Dhamesha
Hi. Thank you for taking my question. The first one is on the CMS proposal on the most favored nation pricing the two models that they have put out. Can you share some color? What is the internal assessment? I believe right now it’s open for the commentary. But what’s your internal assessment of that?
Richard Ascroft
Sure, happy to do so. I think as you know there are three models. There’s a voluntary model that exists today. Which is called the generous model which is directly related to Medicaid within the US and then the other two are proposed. So they are very much in the. Notice and comment phase. We expect that notice and comment phase. To end within this next month. So it’s pretty speculative at this point to know a whether they will stay intact as they are or how they will change. As you would expect, we are working. On all possible alternatives to mitigate any impact.
Kunal Dhamesha
Can you share how we can make the broader aspect as to how we can mitigate? What are the strategies we can employ?
Richard Ascroft
I think there are variety.
Dilip Shanghvi
Start a training session. I think. No, I think these are commercially sensitive information. Is difficult for us to share this information on a public call. If you see none of the pharma companies have given any details about any agreement that they have signed with the government accepting which products are covered. So I think you need to understand that there are things that we can share and there are things that we will not be able to share.
Kunal Dhamesha
Second one on the belly map, we just suggested that we might be in active discussion for new indication. So would this indication be within the therapy areas that we are focusing or we are willing to go beyond our key therapy areas at this moment, given the data especially on the immune mediated adverse events is quite strong compared to the competitor.
Dilip Shanghvi
So I think once. No, I think once we decide we will share the both the information that we can share. We are, as we’ve said, we are evaluating. So while we evaluate there are advantages of staying within the therapy area that we are Present in there are advantages of looking at other areas that we are not present in. So we have to do a commercial risk benefit and time to market analysis.
Kunal Dhamesha
Sure. Thank you. And all the best.
Dilip Shanghvi
Yeah. Thank you.
Richard Ascroft
Thank you.
operator
The next question is from Gautam from LEO Capital. Please go ahead.
Gautam
Hi sir. Thank you for the opportunity. Good evening. I want you to know regarding GLP1, do you have a fill and finish. Capacity and if it’s our own capacity or through partnerships. Capacity.
Kirti Ganorkar
I think I talked about launch in India but we will not comment specifically on capacity. Yeah. And whether it’s in house or it’s outsourced from a third party.
Gautam
All right. And you guys won’t don’t have any timelines, any intention outside India market, any emerging market, only India market will be guided.
Kirti Ganorkar
As of now, as I said earlier, my comment was only on India market. Outside India market. We are not going to disclose what’s our plan.
Gautam
All right. Thank you.
Dilip Shanghvi
Thank you.
operator
Next question is from Tushar Vanodane from Motila Loswal Financial Services. Please go ahead.
Tushar Manudhane
Thanks for the follow up. Just on continuing on innovative sales. So while you highlighted high base in the same quarter last year, is there any X of milestone as well? Any certain sort of one off which would sort of come form an higher base in this quarter as well?
Abhishek Sharma
No, there was no one off in this quarter apart from milestone. Sure.
Tushar Manudhane
Got it sir. And secondly more on the overall performance 23 to 25 there has been almost you know, 13 to 14% CAGR in EBITDA as well as earnings even if I adjust for the milestones income. However FY26, nine months has been, you know, sort of subdued. So if you could just throw some light. While this 9 months R& D spend also has been relatively given the clinical programs at various stages. So how do we see why not you know taking a numerical guidance from your side. But directionally if you could help us. Understand.
Jayashree Satagopan
I think our margins during this year and quarter has also been good factoring in the two new launches and the related expenditure that we have. So I think on a normal, when you look at, on a normal ongoing basis the margins are at comparable basis.
Tushar Manudhane
Ma’, am, I was referring for the growth in EBITDA as well as Pat. While higher spend on innovative medicine to some extent got offset with lower R D spend compared to earlier years. Right.
Jayashree Satagopan
Yeah. So that is a debit level Pat. We have indicated in the past as well our ETR has moved up from around 13 to 15% to currently about 25% and that is the reason why you would see that the pat improvement may not be commensurate with the margin improvement. Improvement.
Tushar Manudhane
Okay. Subsequently is 25% effective tax rate to be number to assume for the 2728.
Jayashree Satagopan
I think it would be sort of in the range we guess.
Tushar Manudhane
Got it. Thank you.
operator
Thank you. The next question is from Shashank Krishna Kumar from MK Global. Please go ahead.
Shashank Krishnakumar
Hi. Thanks for taking my question. My first one was on the launch of an auto injector Illumina in Canada. So wanted to get your thoughts. Possibly move beyond the usual physician administer setting. So do we also have plans to do this in the us? Just wanted to understand that. And just a related question for psoriatic arthritis, is it reasonable to expect a Launch towards the FY27?
Richard Ascroft
Yeah, maybe I can provide the. Oh, go ahead.
Dilip Shanghvi
Yeah. No Rick, please respond.
Richard Ascroft
Yeah, I was going to say so. We’Ve launched a PIN for Lumia in Canada and as another market the product itself administered there. It’s a different situation within the. Within the US we’re currently pleased with. The HCA administration model and that’s our. Current intention. As it relates to psoriatic arthritis. We would expect typical FDA review times as we did. We did submit the application this past quarter.
Shashank Krishnakumar
Got it. Thanks. That’s helpful. Just a second question on India. So do we also plan to launch Sema tablets post March? Just wanted to check.
Kirti Ganorkar
So right now as I said earlier, we have approval for semaglutide injection. Yeah. So we won’t be able to comment on the Semaglutide tablet at this moment.
Shashank Krishnakumar
Thank you. That’s it, thank you.
operator
The next question is from Vishal Manchanda from Systematics. Please go ahead.
Vishal Manchanda
Thanks again. On the phylogen drug fibromin fibromone, can you guide if there is a possibility for the drug to get an accelerated approval?
Dilip Shanghvi
Where
Vishal Manchanda
in the us.
Dilip Shanghvi
I don’t think.
Vishal Manchanda
It’S here for which indication of tissue sarcoma.
Dilip Shanghvi
So my understanding is that they don’t have a priority priority review classification. Like when that I can find out. I am risk if I respond, I’ll respond without having adequate information. So maybe share the specific question with Abhishek and we will get back to you with specific information because this is a product that Phyllogen is responsible for development as well as for finding.
Vishal Manchanda
Got it sir? Yeah, I’ll do that. Thank you.
Dilip Shanghvi
Thank you.
operator
The next question is from Vivek Agarwal from Citigroup. Please go ahead.
Vivek Agrawal
Thanks for the opportunity. The question again is related to Your MNS strategy. Just want to understand in case if you find a suitable suitable M and A target, what kind of the debt you are comfortable with. So are you able to leverage the balance sheet, let’s say 3x of EBITDA? Thank you.
Dilip Shanghvi
No, I think I said that we are comfortable with raising debt. Now it all depends on the targets. Cash flow profile, our confidence that we. Can repay, why we want to go into an area where we have no specific information.
Vivek Agrawal
Thanks. No problem at all. And just one more question on this globe model, Rick, although you are not commenting on your strategy, but just if I look at the model itself, is there any possibility or how you think about the possibility of this, let’s say getting implemented, is it practical or can it get delayed or may not be implemented at all? How do you think about this?
Richard Ascroft
I think that’s pretty speculative. I think we need to wait until the notice and comment period is over and then react. It’s hard to tell at this stage.
Vivek Agrawal
Understood. And are you also working with any kind of deal with the Trump administration?
Richard Ascroft
Can you repeat the question?
Vivek Agrawal
Are you also working with any kind of trade with Trump administration? Like some of the other big pharma companies.
Richard Ascroft
We’Re regularly in conversations with the. US Government on any number of topics.
Vivek Agrawal
Perfect, thanks. That’s from my side.
operator
Thank you. Next question is from Forum Parikh from Bank of Baroda Capital Market. Please go ahead.
Foram Parek
Thank you for the opportunity. Our emerging markets growth is quite buoyant in this quarter. So I hear that it was led by both generics as well as innovative products. But can we elaborate more on this and give us some direction like going forward? How should we look at this region?
Aalok Shanghvi
So all our major geographies in emerging markets are doing well in local currency terms and our constant currency growth for the emerging markets business is 13%. While there was a currency tailwind, both generics and innovative businesses have done well and we don’t guide on revenue growth for specific businesses.
Foram Parek
Okay. My second question is little open ended and it’s on the India business GLP opportunity. So given that the market is going to be very crowded. So what are our thoughts? I mean how excited are we to be in this competitive market? So any thoughts there?
Kirti Ganorkar
Sure. We are very excited to launch the product on the patent expiry and I think the product will when the generic product for Sema is launched, it will also improve the access and the market will expand. Exactly in terms of number of patients or value. We cannot comment on it at this moment but we are all very excited to launch semaglutide equivalent generics in India on patent expiry.
Foram Parek
Sure. And can we talk or give some direction on the pricing side? I mean do we want to be very competitive or how are we going. To be on the pricing side? Any color there?
Kirti Ganorkar
Sure. Pricing. We cannot comment. But I already told you like when the generic comes, it improves the access.
Foram Parek
Sure, no problem. Thanks. Thanks for answering my question.
Dilip Shanghvi
Thank you.
operator
The next question is from Abdul Kader Puranwala from ICICI Securities. Please go ahead.
Abdulkader Puranwala
Yeah. Hi sir. Thank you for the opportunity. So first question is with the generic Samarkul side. I believe we have filed the product in Canada through Tarot. So just wanted to understand, you know. What’S the status there and have you heard anything back from the regulator for the filing?
Kirti Ganorkar
I think I clarified this. The second, third or fourth time is like right now in this call we are discussing semaglutide only for India and. Next.
Abhishek Sharma
Operator we can close the call.
operator
Sure. Yes sir. That was the last question in queue. I would now like to hand the conference back to Dr. Abhishek Sharma for closing comments.
Abhishek Sharma
Yeah. Thanks everyone especially for joining us on this Saturday. If any of your questions have remained. Unanswered, please reach out to me or the investor relations team and we’ll be. Happy to help you. Thank you and have a good evening.
Dilip Shanghvi
Thank you.
operator
Thank you very much on behalf of Sun Pharma. That concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.