Angel Broking neutral on Sun Pharma

Angel Broking has maintained neutral rating on Sun Pharma, in its June 1, 2012 research report.

“Sun Pharma reported higher-than-expected 4QFY2012 performance. Net sales reported 59.2% yoy growth. Net profit grew by 85.3% yoy, driven by higherthan- expected improvement in sales. However, on account of rich valuation recommend a Neutral on the stock.”

“For 4QFY2012, Sun Pharma reported net sales of Rs2,330cr, up 59.2% yoy, mainly driven by domestic and exports. The company’s OPM expanded to 41.1% in 4QFY2012 from 40.6% in 4QFY2011. Also, the gross margin came in line at 78.9% from 78.6% in 4QFY2011. Net profit during the quarter reported 85.3% yoy growth to Rs820cr, higher than expectations, mainly on back of the higher sales growth.”

“Sun Pharma is one of the largest and fastest growing Indian pharmaceutical companies. Management has guided to 18-20% top-line growth for FY2013. We expect Sun Pharma’s net sales to post a 17.6% CAGR to Rs11,080cr. However, on account of pressure on the OPM’s, we expect a flat EPS of Rs22.6 over FY2012–14E. While the current declaration by the Sun with regards to the possible product damages of $1bn on Pantaprazole, as estimated by Pfizer, could act as an overhang on the stock. However, on account of rich valuations, we recommend a Neutral stance on the stock,” says Angel Broking research report. 

Non-Institutions holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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.

To read the full report click on the attachment

Read More