Sun Pharma - 4QFY2013 Result Update - Angel Broking

Sun Pharmaceutical Industries (Sun Pharma) reported more or less in line set of results during 4QFY2013, especially on the net profit front. The net sales and profit came in at Rs. 3,071cr and Rs. 1,012cr vs our expectation of Rs. 2,800cr and Rs. 997cr, respectively. Its net sales reported a 31.8% yoy growth. The OPM also came in at 41.0% vs 41.1% during the last corresponding period. For FY2014, the company has given a guidance of 18-20% on the top-line front. However, on account of the stock's rich valuation, we recommend a Neutral rating on the stock.

In - line results: For 4QFY2013, Sun Pharma reported net sales of Rs. 3,071cr, up 31.8% yoy, mainly driven by exports. The company's OPM remained stable at 41.0% in 4QFY2013 from 41.1% in 4QFY2012. Also, the gross margin came in at 82.8% from 78.9% in 4QFY2012. The net profit during the quarter reported a 23.3% yoy growth to Rs. 1,012cr, mostly in line with expectations of Rs. 997cr.

Outlook and valuation: Sun Pharma is one of the largest and fastest growing Indian pharmaceutical companies. We expect its net sales to post a 12.1% CAGR over FY2012-15 to Rs. 15,846cr. However, on account of moderation in OPM, we expect a flat EPS of Rs. 39.8 over FY2013-15. On account of rich valuations, we recommend a Neutral stance on the stock.

Source : Equity Bulls

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