(Rating: ADD, TP: Rs820, Upside: 6%)
US sales ramp up, margin comfort key positives
- Sun Pharma clocked a modest ex-Taro US quarter in a palpable relief as ex-Taro US sales not as much impacted by price erosion as seen with peers.
- Key to watch would be the ramp up in US specialty sales and margin trajectory. We expect investments to inch up on existing and acquired products like Winlevi.
- Expect margins to normalize for rest of FY22 and improve to ~25% on sustainable basis in FY23.
- ADD stays on a business whose specialty sales can offer some buffer in times of steeper price erosion than seen in past 1-2 years.
- We marginally tweak domestic sales and expect a stronger US momentum be carried in to FY23; revise our TP upwards to Rs820.
Shares of Sun Pharmaceutical Industries Ltd. was last trading in BSE at Rs. 774.45 as compared to the previous close of Rs. 774. The total number of shares traded during the day was 741708 in over 23140 trades.
The stock hit an intraday high of Rs. 799.6 and intraday low of 764. The net turnover during the day was Rs. 576652430.