Angel Broking neutral on Sun Pharmaceutical Industries

Angel Broking's report on Sun Pharmaceutical Industries

"For 2QFY2015, Sun Pharmaceuticals Industries (Sun Pharma) posted sales of Rs 4,751cr (V/s an expected Rs 4,737cr), a yoy growth of 13.3%, driven by domestic markets which grew by 21.3% yoy. On the operating front, the gross margin came in at 82.9% (V/s an expected 80.5%), an expansion of 203bp yoy, which lead the OPM to come in at 45.5% (V/s an expected 42.3%), a yoy expansion of 188bp. In-spite of the higher than expected OPM, the Adj. net profit came in lower than our expectation at Rs 1,572cr (V/s an expected Rs 1,670cr), a growth of 15.4% yoy. For FY2015, the company has maintained its sales guidance of 13-15% yoy."

"Sun Pharma is one of the largest and fastest growing Indian pharmaceutical companies. We expect its net sales to post a 25.4% CAGR (including Ranbaxy Laboratories) to Rs 38,386cr and EPS to post a 10.7% CAGR to Rs 34.9 over FY2014–16E. We remain Neutral on the stock, given the valuations", says Angel Broking research report.

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