MOSL: SUN PHARMA (Buy)- Domestic Formulation / US (ex-Taro) on steady footing
SUN PHARMA: Domestic Formulation / US (ex-Taro) on steady footing
(SUNP IN, Mkt Cap USD26.2b, CMP INR815, TP INR970, 19% Upside, Buy)
Enhanced portfolio / Newer markets to drive specialty sales
- Sun Pharma (SUNP) delivered yet another robust quarterly performance, with the beat on margins led by Domestic Formulation (DF) / Emerging Markets (EM) and sustained momentum in global specialty sales.
- We raise our earnings estimate by 7%/3% for FY22E/FY23E, factoring in a) a continued ramp-up in the Ilumya-led Specialty portfolio, b) faster growth in non-COVID, Chronic therapy sales in DF, c) superior traction in Emerging Markets, and d) deferred R&D spending on specialty clinical trials. We continue to value SUNP at 25x 12M forward earnings to arrive at Target Price of INR970.
- We remain positive on SUNP’s a) increasing portfolio offerings in the Specialty segment, b) market share gains in the Branded Generics segment, and c) a healthy and steady pace of launches in US Generics (ex-Taro). Maintain Buy.
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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