Our FY25/FY26 earnings estimates stands marginally increased by ~2%. Sun Pharma (SUNP) Q1FY25 EBIDTA was 6% above with our estimate, aided by higher domestic formulation sales and lower R&D spend. Overall specialty sales, GMs continue to remain healthy. Over last few years SUNP dependency on US generics has reduced and company’s growth is more functional on specialty, RoW and domestic pharma business that has strong growth visibility. Though FY25 expenses may remain elevated given company are in investment phase to ramp up specialty pipeline; launch of deuruxolitinib along with progress of other pipelines provides visibility to SUNP’s specialty pipeline beyond FY25.
OutlookWe maintain ‘BUY’ rating at TP of Rs.1885 based on 35x FY26E earnings. SUNP remains our top pick in large cap space.
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