Moneycontrol
Last Updated : May 28, 2018 10:44 AM IST | Source: Moneycontrol.com

Sun Pharma gains 8% post Q4 nos; CLSA, Macquarie upgrades rating

Consolidated EBITDA margin stood at 24.1 percent in Q4FY18.

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Shares of Sun Pharmaceutical Industries rose 8 percent intraday Monday as research house including CLSA and Macquarie has upgraded rating on stock post Q4 numbers.

The company's consolidated net profit rose 6.94 percent year-on-year (YoY) to Rs 1,309 crore in the fourth quarter ended March, beating analysts' estimates.

The profit was boosted by a one-time tax benefit of Rs 259 crore in Q4 related to certain intangibles. Excluding the one-time tax benefit of Rs. 259 crore, the adjusted net profit for the quarter was Rs. 1,050 crores.

The company said they also had USD 20 million milestone payment in the fourth quarter from Spanish drug maker Almirall as part of the licensing agreement for the development and commercialization of Tildrakizumab for psoriasis in Europe.

Consolidated revenue for the quarter declined 1.11 percent YoY to Rs 7,279.9 crore in Q4 but was above analysts' estimate of Rs 6,778.8 crore.

Consolidated EBITDA margin stood at 24.1 percent in Q4FY18.

The company has recommended payment of dividend of Rs 2 per equity share of Re 1 each of the company for the year ended March 31, 2018.

Brokerage: CLSA | Rating: Buy | Target: Rs 600

CLSA has upgraded Sun Pharma from sell to buy rating as they believe its earnings has bottomed and revised the target price to Rs 600 from Rs 445.

EPS to nearly double as monetisation of specialty pipeline begins, it added.

Brokerage: Macquarie | Rating: Buy | Target: Rs 460

Macquarie has upgraded Sun Pharma to neutral from underperform rating and keep target at Rs 460 per share.

According to the Macquarie, the company has balanced risk-reward. Also, the US sales showing some signs of stability and company is guiding for improves sales in the US.

Brokerage: Jefferies | Rating: hold | Target: Rs 500

Jefferies has maintained hold rating on Sun Pharma and cut target price to Rs 500 from Rs 520.

The fourth quarter results were ahead of expectation led by recovery in US, it added.

The management guidance was muted at low double digit revenue growth in FY19, while Halol resolution has also been delayed to H2FY19.

The valuations at 20xFY20 leave no room for misses, it said.

Brokerage: Deutsche Bank | Rating: Hold | Target: Rs 431

Deutsche Bank has maintained hold rating on Sun Pharma, while cut price target to Rs 431 from Rs 496.

According to research firm, the Q4 is in line, while US revenue offset weak India business growth.

Execution in US business remains the key monitorable and specialty launches to drive sentiment in the near term, it said.

Brokerage: HSBC | Rating: Hold | Target: Rs 510

HSBC has downgraded Sun Pharma to hold rating from buy and cut price target to Rs 510 from Rs 650 per share.

Q4 gross margins expand on better product mix and lower costs and expect operating expenses to increase on account of speciality drugs, it said.

Brokerage: Edelweiss | Rating: Hold | Target: Rs 480

Edelweiss has maintained hold rating on Sun Pharma with a target of Rs 480 per share.

With the recent run up in the stock, we believe most upsides from Halol clearance and specialty pipeline are already baked in the price.

We believe the risk-reward is not favorable; moreover, we see limited upside from the current level, it added

At 10:42 hrs Sun Pharmaceutical Industries was quoting at Rs 503.50, up Rs 36.95, or 7.92 percent on the BSE.

Posted by Rakesh Patil
First Published on May 28, 2018 10:43 am
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