MOSL: SUN PHARMA (Buy)-Mohali 483–Product approval or EIR key for compliance
Sun Pharma: Mohali 483–Product approval or EIR key for compliance
(SUNP IN, Mkt Cap USD21.4b, CMP INR647, TP INR790, 22% Upside, Buy)
- The USFDA conducted an inspection at SUNP's Mohali plant during 10-14 September 2018, and issued Form 483 with two observations.
- We believe SUNP will be able to address these observations with a strong response, and subsequently take a corrective and preventive action (CAPA) plan on the same. Following this, we await product approvals and/or the Establishment Inspection Report (EIR) for regulatory compliance at Mohali.
- We remain positive on SUNP on the back of better traction in specialty portfolio, healthy growth in the generics business after offsetting the decline in base business, and better-than-industry growth in domestic formulations.
- Maintain 'Buy' with a price target of INR790 at 27x 12M forward earnings (unchanged).
Sun Pharmaceutical and its subsidiaries are principally engaged in developing, manufacturing and marketing generic pharmaceutical products and bulk drugs. Co.'s products are mainly for the following therapy areas: psychiatrists, neurologists, gastroenterologists, diabetologists, chest physicians, consultant physicians, orthopedics, oncologists, gynecologists, ophthalmologists and cardiologists. Generic names of three principal products of Co. is Pentoxifyline, Pentoparzole Sodium, and Metformin Hydrochloride. Co.'s business can be divided into four segments: Indian branded generics, U.S. generics, international branded generics (ROW) and Active Pharmaceutical Ingredients (API).
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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