Sun Pharma an outperformer: Karvy

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Karvy Stock Broking has rated Sun Pharmaceutical Industries as an outperformer with a target price of Rs 1245 in its December 3, 2008 research report. "Sun Pharma has stated that the USFDA has granted Osmotica's citizens petition regarding Venlafaxine extended release tablets (Effexor XR). We believe the company would loose this opportunity of Effexor XR in US which we had factored in FY 2010. We have removed Effexor XR from our model. Sun Pharma's reaction to this development was not disclosed. The company has 96 pending ANDAs which includes 19 Para IV. We also factor in USD 6 million and USD 26 million on account of Chattem Chemicals for FY 2009 and FY 2010. We downgrade our earnings for FY 2010 by 22% from Rs 99.1(inclusive of FTF upside of Rs 28.4) to Rs 77.2. We downgrade our price target by 10.2 % to Rs 1245. We value our core business at 16x FY 2010E which translates in a value of Rs 1245. We continue to rate the stock as Outperformer," says Karvy's research report.

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