HDFC Securities' research report on Sun Pharma
Sun Pharma (SUNP) posted underwhelming numbers in 3QFY17. Revenues grew 12% YoY, EBITDA margin was at 31% (down 732bps QoQ) and PAT came in at Rs 14.7bn. Substantially lower gross margins on account of Olmesartan AG sales in the US and integration of Novartis’s business in Japan dragged the overall EBITDA margin down.
Outlook
Ranbaxy synergies of US$ 300mn and sales from the robust specialty portfolio (MK-3222, Odomzo and Seceira) are likely to be the key growth drivers going forward. Maintain BUY with a revised TP of Rs 850 (22x on Dec-18E).
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