Feb 16, 2017 01:47 PM IST | Source:

Buy Sun Pharmaceuticals; target of Rs 860: Edelweiss

Edelweiss is bullish on Sun Pharmaceuticals has recommended buy rating on the stock with a target price of Rs 860 in its research report dated February 14, 2017.

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Edelweiss' research report on Sun Pharmaceuticals

Sun Pharmaceuticals’ (SUNP) Q3FY17 revenue/ EBITDA were up 11%/9% YoY, but PAT fell 5% YoY. While Olmesartan sales and its combination made up for revenue void left by Imatinib, it diluted gross margin. Thus, sequentially while revenue fell mere 4%, EBITDA dipped 23%. Halol’s remediation will still take ‘some quarters’, and SUNP has started site transfers of some critical products.


We risk‐adjust our estimates and cut FY17/18E EPS by 13%/19%, and introduce FY19E. While its journey to transform into a specialty player is taking a toll on profits, we believe these investments will help SUNP build a sustainable base business over time. Maintain ’BUY’ with rolled TP of INR 860 (22x FY19E EPS).

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