Buy Sun Pharmaceutical Industries; target of Rs 528: ICICI Securities

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26 Aug, 2025 12:21

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ICICI Securities research report on Sun Pharmaceutical Industries

Sun Pharmaceutical Industries’ (Sun) reported Q4FY20 performance was below our estimates due to higher operating costs and forex loss, although revenue was higher than estimated. Revenue grew 14.3% YoY to Rs81.8bn (I-Sec: Rs79.0bn) and adjusted PAT grew 3.9% to Rs6.6bn. EBITDA margin at 16.7% missed our estimates by 310bps due to forex loss (170bps) and lower gross margin (110bps), caused the lower profitability. The company is focusing on cost rationalisation measures and improving product mix. Continued scale-up in global specialty sales is positive and we believe loss in Absorica sales post generic competition in H2FY21 could be compensated by ramp-up of Ilumya and Cequa.

Outlook

We remain positive on long-term outlook considering strong India business, pick-up in specialty sales and attractive valuations. Maintain BUY.

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