Sharekhan's research report on Sun Pharmaceutical Industries
Sun Pharmaceutical’s (Sun Pharma)’s gross margins improved for the fourth consecutive quarter y-o-y in Q4FY2023 due to a strong product mix It is to acquire Taro Pharma, by acquiring the remaining ~21.5% stake, which will enable Sun Pharma to get access to the total cash of USD 1.3 billion on its books. R&D spending stood at ~6% of sales; management expects it to increase to ~7-8% of revenue.
Outlook
The stock trades at ~24.9x/22.7x its FY2024E/FY2025E EPS. We believe superior profitability enables it to trade at a premium to peers. We maintain Buy with a revised price target of Rs. 1,123.
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