Sun Pharma underperformer, target Rs 1355: Karvy

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Karvy Stock Broking has recommended an underperformer rating on Sun Pharmaceuticals , with price target of Rs 1355, in its report dated November 6, 2009.

"We have decreased our domestic formulations business in line with H1 numbers and assumed a 15 % growth in H2 FY2010. We have upgraded revenues on account of Pantaprazole revenues for FY 2010. We have lowered our net revenues by 4.4 % to Rs 39 .4 bn for FY 2010 and by 5.1 % to Rs 43.1 bn for FY 2011E. We have lowered our EPS estimates by 7 % in FY 2010E to Rs 57.3 and by 2.6 % to Rs 67.1 for FY 2011E. Currently the stock is quoting at 24.3xFY2010E and 20.2x FY 2011E.We downgrade our price target by 2% to Rs 1,355 based on 20.2x FY2011E.We downgrade our rating on the stock to Underperformer." says Karvy.

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