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Last Updated : Nov 08, 2019 10:36 AM IST | Source: Moneycontrol.com

Sun Pharma slips 2% after Q2 results; Citi, CLSA maintain buy - Here's why

Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 16.9 percent to Rs 1,790 crore in Q2FY20, while margin remained flat at 22 percent YoY.

 
 
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Sun Pharmaceutical Industries was down close to 2 percent in the early morning trade on November 8 despite reporting consolidated profit at Rs 1,065 crore in the July-September period, significantly better than a loss of Rs 269.6 crore in the same period last fiscal.

The consolidated revenue grew by 17.1 percent year-on-year to Rs 8,123.3 crore, backed by India and the rest of world sales. Emerging market sales rose 3 percent to $201 million year on year, but the US numbers remained unchanged at $339 million.

At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 16.9 percent to Rs 1,790 crore, while margin remained flat at 22 percent YoY.

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Other income fell 42.8 percent year-on-year to Rs 200.8 crore, impacting the bottomline.

Here's how global brokerages rate the stock:

Morgan Stanley: Overweight

The global research firm has retained an overweight call on the stock and raised the target to Rs 530 from Rs 505 per share. It remains the top pick in the pharma space, the firm said.

The research firm raised FY20 estimates by 4.9 percent, taking into account strong H1 results.

Citi: Buy

Citi has a buy rating on the stock, with the target at Rs 540 per share. The firm is of the view that the worst appears to be behind the generics business, while a meaningful pick-up in growth remains elusive. Progress on specialty initiatives would be a key to the stock’s performance, it said.

The research firm said the commentary remained positive, but it was difficult to gauge the pace of ramp-up. It cut FY20/21 EPS estimates by 5 percent to factor in lower US sales.

CLSA: Buy

Global research firm has retained its buy rating on the stock, with the target at Rs 540 per share. It also left FY20-22 EPS estimates unchanged. It is of the view that strong execution on ramp-up of specialty pipeline can drive a rerating.

Credit Suisse: Neutral

Credit Suisse has maintained a neutral call on the stock, with the target at Rs 450 per share. The firm has maintained a cautious stance, as Ilumya ramp-up is slow, while Cequa may be impacted by generics in Restasis.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Nov 8, 2019 10:36 am
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