Hold Sun Pharma; target of Rs 800: KRChoksey

KRChoksey report on Sun Pharmaceutical Industries

"Sun Pharma’s Q1FY15 results were below our estimates on account of lower than expected Taro’s performance. Revenues grew by 12% YoY to Rs3936crs. Taro posted sales of USD 130mn below our expectation on account of price protection charges. However domestic business showed strong performance in line with our estimates. EBITDA grew by 11.7% YoY to Rs 1733crs & margins were at 44.0%. Reported PAT stood at Rs. 1391crs versus loss of Rs 1276crs. The loss in Q1FY14 was on account of provision of Rs 2517crs related to Protonix litigation. After adjusting the same in Q1FY14, APAT showed growth of Rs 12% YoY."

"We expect revenue growth of 14.6% & 13.4% in FY15E & FY16E & PAT growth of 9.1% & 10.4% in FY15E & FY16E respectively on higher base. At CMP of Rs800 the stock is trading at 26.5 xFY15E & 24.1xFY16E AEPS. We recommend ‘Hold’ rating on the stock with the target Price of Rs 800 at 24xFY16E," says KRChoksey research report.

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