Buy Sun Pharma; target of Rs 944: Firstcall Research

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26 Aug, 2025 12:21

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Firstcall Research report on Sun Pharmaceutical“Sun Pharma Industries Ltd. was established in 1983 with five psychiatry products and a compact manufacturing facility at Vapi, Gujarat. The company started exporting in 1989 to neighboring countries. Sun pharma went public in 1994 and its IPO was oversubscribed by 55 times. In 2007, Sun Pharma demerged its research company into a separate entity, Sun Pharma Advanced Research which has been listed on Indian stock exchanges. At present Sun Pharma is the largest specialty pharmaceutical company in India with established brands across niche therapies such as psychiatry, neurology, cardiology, nephrology, gastroenterology, orthopedics and ophthalmology.” “Sun Pharma has evolved into an international, integrated, specialty pharmaceutical company with 75% of its revenues from US branded generics market and rest of the world. The company has strong research teams in generics, finished dosage development, biological support and chemistry with over 900 scientists in 4 R&D centers. The company has entered into a joint venture with Merck for emerging markets excluding India. With equal representation in the joint venture, the agreement allows each partner to use each others infrastructure for development, manufacturing and commercialization. Sun Pharma has led its inorganic growth through various acquisitions and joint ventures all over the world. Its recent acquisition has been URL and DUSA in the US. Sun Pharma, a leader in chronic therapies is ranked 2nd and holds 5.4% market share in the Rs.770000 mn Indian pharmaceutical market. Sun Pharma has 18 manufacturing sites worldwide. There are 6 manufacturing sites each in India and US and one each in Canada, Brazil, Mexico, Hungary, Israel and Bangladesh.” “At the current market price of Rs.857.80, the stock P/E ratio is at 26.98 x FY15E and 23.89 x FY16E respectively. Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs. 31.80 and Rs.35.90 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 23% and 34% over 2013 to 2016E respectively. On the basis of EV/EBITDA, the stock trades at 19.00 x for FY15E and 16.39 x for FY16E. Price to Book Value of the stock is expected to be at 7.18 x and 5.52 respectively for FY15E and FY16E. We recommend ‘BUY’ in this particular scrip with a target price of Rs.944.00 for Medium to Long term investment,” says Firstcall Research report.

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