Hold Sun Pharmaceuticals; target of Rs 480: Edelweiss

Edelweiss's research report onSun Pharmaceuticals

Sun Pharmaceuticals’ (SUNP) Q4FY18 numbers adjusted for one-offs were in-line with our estimates. Key highlight was low double-digit revenue growth guidance for FY19. This assumes Halol clearance and launch of Ilumya, Yonsa and Seciera in FY19. Though we expect the business to come back to its growth trajectory, specialty investments are likely to remain high in the short term.

Outlook

With the recent run up in the stock, we believe most upsides from Halol clearance and specialty pipeline are already baked in the price. Hence, we believe the risk-reward is not favorable; moreover, we see limited upside from the current level. Hence, we maintain ‘HOLD/SU’ with TP of INR 480 (22x FY20E EPS).

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