KR Choksey's research report on Sun Pharmaceutical Industries
SUNPHARMA exceeded our profitability estimates by a huge margin for Q1FY25. The EBITDA exceeded by 12% and EBITDA margins by 391 bps from our estimates while GPMs exceeded the expectations marginally by 36 bps from our estimates for Q1FY25. The products mix continues to be favorable with Global specialty sales increasing. The company has been witnessing slower growth in the US segment and RoW growth has also weakened. Winlevi is seeing Q-o-Q decline in volumes but sees increased realization per its Rx (as per management commentary). The stock is currently trading at 33.6x/30.7x of our estimated FY25E/FY26E EPS.
Outlook
We continue to assign a P/E multiple of 32.0x on FY26E EPS of INR 57.0 and maintain Target Price of INR 1,827 but downgrade it to ACCUMULATE from BUY as the upside potential is 5.0% from its CMP.
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