Two brokerages have reaffirmed their 'Buy' call on Sun Pharmaceutical Industries Ltd after the country's largest drugmaker by revenue reported a 29.60 per cent rise in fourth quarter Q4 earnings of the week to February 23, compared to the same period a year ago. The company's combined profit before exceptional items and tax rose to Rs. 2,411 crore for the quarter ending March 31. The total revenue from operations grew 15.70 percent to Rs 10,931 crore.
The company has proposed a final dividend of Rs 4 per share for the year 2023 FY23, adding to a previously paid interim dividend of Rs 7.50 per share.
Jefferies, global research and broking firm, maintained its 'Buy' rating on the stock with a revised target of Rs 1,150 per share from Rs 1,200 earlier. Sun Pharma's shares were seen 1.51 per cent lower on Monday at 955.95 compared to its previous close of 970.65. Considering Friday's closing price, the brokerage proposed a potential upside of 18.48 per cent on the counter.
Prabhudas Lilladher, another broker, maintained a 'Buy' rating with a target price of 1,140 Rs 1,175 earlier based on 25 x FY 25 E earnings. The counter is our top pick in large-cap space, the company said in a statement.
Sun Pharma Q 4 FY 23 EBIDTA was 4 per cent above our estimate, aided by gRevlimid and higher specialty sales. Overall specialty sales continue to remain healthy while other expenses remain elevated on the back of higher SG&A and R&D expenditures, Prabhudas said.
Sun Pharma's dependence on US generics has reduced and the company's growth is more functional on specialty, RoW and domestic pharma businesses that have strong growth visibility. The acquisition of Concert Pharma provides visibility to the company's specialty pipeline beyond FY25, it said.
The brokerage also said that strong Q4 revenue growth was boosted by higher gRevlimid and specialty sales.
While Indian equity benchmarks extended their gains in today's deals, they were also experiencing positive global sentiments. Today, the domestic indices surged, led by gains in banks, financial and consumer stocks.