Prabhudas Lilladher's research report on Sun Pharmaceutical Industries
We reduce our FY24/FY25 earnings estimates by 4%/2%. Sun Pharma (SUNP) Q4FY23 EBIDTA was 4% above our estimate, aided by gRevlimid and higher specialty sales. Overall specialty sales, GMs continue to remain healthy while other expenses remain elevated on back of higher SG&A and R&D spends. Over last few years SUNP dependency on US generics has reduced and company’s growth is more functional on specialty, RoW and domestic pharma business that has strong growth visibility. Furthermore, acquisition of Concert Pharma provides visibility to SUNP’s specialty pipeline beyond FY25.
Outlook
We maintain ‘BUY’ rating at TP of Rs.1140 (Rs1175 earlier) based on 25x FY25E earnings. SUNP remains our top pick in large cap space.
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