Organon Acquisition Costs Weigh on Sun Pharmaceutical’s Third-Quarter Profit

Key Facts

The company said quarterly sales were 161,000 million rupees, up 11.8%. Reported profit fell after it booked a one-time charge of 12.69 billion rupees. Most of the charge was related, according to Reuters, to costs for the planned acquisition of Organon and provisions linked to India’s labor code framework. The results show a divergence between revenue growth and a decline in net profit after exceptional items.

Excluding the charge, profit rose 6.3% to 44.28 billion rupees, according to Reuters. The figure highlights the difference between the company’s performance before the exceptional cost and its reported accounting result for the period. The company also reported EBITDA of 47,439 million rupees, up 4.8%, while its margin was 29.3%, according to a Sun Pharma statement. These operating indicators accompany overall sales growth, but do not erase the charge’s impact on reported net profit. The company said deal expenses were part of the charge, which also included other costs.

Performance varied by geography during the quarter: sales in India, Sun Pharma’s largest market, rose 17.3%, while U.S. sales fell 8.2%, according to Reuters. The Indian market supported overall growth as contraction in the United States exerted pressure in the opposite direction. Specialty medicines sales rose 6.9% to $356 million. The segment accounted for 21.1% of total quarterly sales. The figures reflect contributions from more than one driver, with growth moving in different directions across markets and segments.

The results come as Sun Pharma plans to acquire Organon in an agreed all-cash deal worth $14 per share, with an enterprise value of $11.75 billion. Organon shareholders approved the deal proposals in July, but completion remains conditional on satisfying closing conditions and obtaining the relevant regulatory approvals. Sun Pharma said integration planning was proceeding as planned and regulatory approvals had been received in most regions, while other jurisdictions remained on the stated timeline. Organon, for its part, expects the merger to be completed in early 2027, subject to customary conditions, including regulatory approvals. The deal gives Sun Pharma a presence in a company that reported revenue of $6.2 billion and adjusted EBITDA of $1.9 billion in 2025, according to Organon.

Sun Pharma shares rose 4.2% to 1,835 rupees after the results were announced, according to Reuters. The stock advanced despite the decline in reported net profit, amid differing market assessments of the one-time charge and profit growth excluding it. In a filing dated October 19, Organon said it planned to report third-quarter 2026 results in its periodic Form 10-Q. The company also paused quarterly earnings calls during the Sun Pharma acquisition waiting period. The deal’s next step remains tied to completing outstanding approvals and conditions, while Sun Pharma said jurisdictions that had not yet issued approvals remained on schedule.