Hold Sun Pharma; target of Rs 530: Centrum Research

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26 Aug, 2025 12:21

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Centrum Research's research report on Sun Pharma

We maintain our Hold rating on Sun Pharma (SPIL) with TP of Rs530 (earlier Rs520) based on 26x March’20E EPS of Rs20.4. SPIL’s Q4FY18 revenues were in-line with our expectations. EBIDTA margin and net profit exceeded our expectations. The drug maker’s revenue declined 2% YoY, margins improved by 240bps to 24.1%, and net profit grew 10% YoY. SPIL is facing supply constraints at its Halol facility. Key upside risks to our assumption include higher revenues from the US market and key downside risk includes regulatory risks for its manufacturing facilities catering to the global markets. We recommend a switch to Aurobindo or Cipla.

Outlook
We maintain our Hold rating on SPIL with revised TP to Rs530 based on 26x March’19 EPS of Rs20.4 and upside of 7.2% from the CMP. Key positive risks to our assumptions would be higher growth in the US market and key negative risk would be regulatory risks for its manufacturing facilities. We recommend a switch to Aurobindo or Cipla.
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