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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