Sun Pharmaceuticals' second-quarter 2015 earnings grew by 15%, underpinned by strong growth in top-line revenues in its India business and gross margin expansion in its U.S. subsidiary, Taro. Total revenue was up 13% for the quarter, year on year, with the fastest growth in India formulations (25% of quarterly sales) at 21%; U.S. sales (64% of quarterly sales) followed with growth of 15% and other regions (12% of quarterly sales) up 12%. Growth in the U.S. was primarily driven by price increases at Taro (32% of quarterly sales) given existing contractual agreements with customers. As a result of these price increases, Taro's sales were up by 22% despite a slight fall in volumes. Gross margins for Sun improved by 200 basis points to 83% as the result of an increase in Taro's gross margins, which ended 130 basis points higher at 79% compared with the same quarter last year. Our fair value estimate of INR 992 per share is unchanged, as the performance was broadly in line with our expectations.
Taro, in which Sun Pharmaceuticals owns 68.9% equity and 79.2% voting power, also hosted its first quarterly conference call since 2010, which we view as a positive development. Quarterly revenue for the yet-to-merge Ranbaxy business was up 16% and profit turned positive at INR 4.8 billion after five quarters, supported by the 180-day exclusivity sales of Valsartan in its U.S. business (which grew by 62% against the prior period and accounted for 44% of Ranbaxy's quarterly sales).
We believe Sun Pharmaceuticals' narrow economic moat, which is based on its low-cost advantage and focus on complex products, remains intact. Management continues to enter limited competition products, with a focus on the heavily regulated dermatology space, a capability that will be further enhanced with the addition of Ranbaxy to its portfolio.