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Buy Sun Pharma; target of Rs 830: Motilal Oswal

Motilal Oswal is bullish on Sun Pharma recommended buy rating on the stock with a target price of Rs 830 in its research report dated May 28, 2021.

June 10, 2021 / 11:33 AM IST
An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

 
 
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Motilal Oswal's research report on Sun Pharma


Sun Pharma (SUNP) delivered a 4QFY21 performance marginally below our expectations, weighed by moderation in US and API sales. Domestic Formulation (DF) business growth has been strengthening for three consecutive quarters now. Marketing efforts are driving strong performance in Illumya, a specialty product – 51% YoY growth was reported for FY21. It further intends to build a Biosimilar portfolio for launch over CY28–30. We raise our earnings estimate by 9%/8% for FY22E/FY23E, factoring in a) continued ramp-up in Illumya, led by the Specialty portfolio, b) healthy growth in the base DF portfolio as well as additions to the COVID portfolio, and c) subsequently better operating leverage. We continue to value SUNP at 25x 12M forward earnings to arrive at TP of INR740. Maintain Buy.


Outlook


Accordingly, we raise our TP to INR830 on a 25x 12M forward earnings basis. We remain positive on SUNP on its superior execution in the global Specialty portfolio / Branded Generics and a robust ANDA pipeline. Maintain Buy.


For all recommendations report, click here


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first published: May 31, 2021 12:35 pm

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