Prabhudas Lilladher is bullish on Sun Pharma and has recommended accumulate rating on the stock with a target of Rs 805 in its February 08, 2013 research report.
“Sun Pharma’s Q3FY13 performance was far better than estimates. Top-line growth was led by US business and emerging markets exports. The performance was partly boosted by supplies of exclusivity product Lipodox to US and favourable currency. At the current price, the stock trades at 23.4x FY13E and 18.5x FY14E earnings. We maintain ‘Accumulate’ with target price of Rs809.”
“Sun Pharma’s top-line grew by 33% YoY to Rs28.5bn. The growth was led by US businesses and emerging markets exports which grew by 44% and 40%, respectively. Domestic formulation business reported slightly muted growth of 13% YoY. The company has reported 31% YoY growth in EBITDA to Rs12.6bn led by strong top-line growth. The margins remained flat at 44.2%, partly impacted by one-time expenses. Adjusted PAT grew by 44.2% YoY to Rs8.8bn, partially boosted by higher other income during the quarter but impacted by higher tax rate YoY.”
“Sun Pharma continues to deliver superior performance led by all the business segments. The company has strong balance-sheet to support inorganic growth initiatives. A superior business franchise in US and India are likely to deliver sustained value to the shareholders. We believe that the company will continue to deliver strong performance, going forward. At current price, the stock trades at 23.4x FY13 and 18.5x FY14. We maintain ‘Accumulate’ with target price of Rs805. We believe that every sizable acquisition, going forward, will be key trigger for the stock,” says Prabhudas Lilladher research report.
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