August 18, 2016 / 14:01 IST
Religare's research report on Sun Pharmaceuticals
SUNP’s Q1FY17 revenue/PAT beat RCMLe by 3%/10% led by strong gGleevec sales during the quarter, one-off sales of US$ 35mn and lower R&D spends. However, we expect earnings to moderate in the ensuing quarters as R&D spends trend up, competition in gGleevec increases and Taro’s base portfolio sees higher erosion (US$ 30mn QoQ decline in Q1). Nevertheless, resolution of Halol issues could be a key near-term trigger. We retain estimates and maintain HOLD with a Mar’17 TP of Rs 875.
While we largely factor in moderate earnings growth into our estimates, we believe resolution of issues at the Halol facility (USFDA re-invited for re-inspection) would be a key near-term trigger. We maintain estimates and a HOLD rating on the stock with a Mar’17 TP of Rs 875.
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