Emkay Global Financial Services is bullish on Sun Pharmaceutical Industries and has recommended buy rating on the stock with a target of Rs 800 in its November 9, 2012 research report.
“Sun Pharma's, US formulations (contributed 49%) grew by 40% in USD to US$244mn driven by 64% growth in Sun’s base US biz to US$110mn led by recent launches viz. Lipodex, Stalevo, Plavix, Taxotere, Imitrex, Cardizem & Uroxatral. 25% growth in Taro US biz to US$134mn led by strong momentum in derma Products. Domestic branded formulations (contributed 30%) grew 15% YoY to Rs8bn led by continuing leadership in key specialties and launch of 15 products in H1FY13. Domestic branded formulations (contributed 30%) grew 15% YoY to Rs8bn led by continuing leadership in key specialties and launch of 15 products in H1FY13. EBITDA margins increased 273bps YoY & contracted 218bps QoQ to 44%. Taro margins increased 577bps YoY & 150bps QoQ to 54% led by price increase in derma products in US.”
“Going forward, strong traction from US market and a solid domestic business will lead to 21% earnings CAGR over FY12-14E. Company has guided for 25 ANDA filings in US in FY13. As on date the company has 395 filings of which 255 are approved and 156 are pending for approval. Domestic formulation is expected to grow at 18% on back of ~30 product launches in FY13 and traction in Merck JV. Sun has already launched 9 new products in Q1FY13.”
“We expect Sun Pharma to report revenue growth of 30% in FY13E and 11% in FY14E. EBIDTA margins are expected to hover around 41% in FY13. Earnings will grow by 21% CAGR over FY12-14E. Maintain buy with a target of Rs800 (22x FY14E EPS of Rs36). At CMP, the stock trades at 22x FY13E and 19x FY14E EPS,” says Emkay Global Financial Services research report. Shares held by Mutual Funds/UTI 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
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