Buy Sun Pharmaceutical Industries; target of Rs 1070: Prabhudas Lilladher

Prabhudas Lilladher's research report on Sun Pharmaceutical Industries

Sun Pharma (SUNP) reported strong EBIDTA growth adjusted for COVID in Q1FY23 aided by 1) global ramp-up of specialty products, 2) focus on domestic market and 3) steady ROW market. Company’s significant investments and efforts in specialty business has started paying off in upward trajectory with 39% YoY growth in FY22 and 29% YoY in Q1FY23. Sustained momentum in specialty will help in improving operating leverage and margins too. Also, domestic formulations (32% of total revenue) continues to outperform IPM.

Outlook

Our FY23E and FY24E EPS stands increased by 5%. We maintain our ‘Buy’ rating with revised TP of Rs 1,070 (Rs 1020 earlier) based on 25x FY24E earnings. SUNP remains our top pick in large cap space.

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Sun Pharmaceutical Industries -010822 - prabhu