Sharekhan's research repor on Sun Pharmaceuticals Industries
Sun Pharmaceuticals Industries (Sun Pharma) reported a healthy performance for Q1FY2021. Revenues declined 9.4% yoy While operating margins were almost flat, though were ahead of estimates. The adj PAT after minority interest grew 43% YoY. The domestic business is expected to grow at a healthy pace, backed by new launches and growth in the chronic portfolio. The US business continues to witness competitive pressures leading to sustained price erosion. Also ramp up in US specialty business is slow. USFDA approval on Halol plant is a key monitorable as management has submitted it sresponses to the regulator.
Outlook
Uncertainties persisting around the US business and India business (acute therapy) could impact the growth prospects. Consequently, we hold back from taking a constructive view on the company and retain our Hold recommendation.
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