Motilal Oswal has given Buy recommendation for Sun Pharma recommended buy rating on the stock with a target price of Rs 830 in its researc with a target price of Rs. 830 in its research report issued on May 28, 2021

Motilal Oswal’s research report on Sun Pharma

Sun Pharma (SUNP) delivered a 4QFY21 performance marginally below our expectations, weighed by moderation in US and API sales. Domestic Formulation (DF) business growth has been strengthening for three consecutive quarters now. Marketing efforts are driving strong performance in Illumya, a specialty product – 51% YoY growth was reported for FY21. It further intends to build a Biosimilar portfolio for launch over CY28–30. We raise our earnings estimate by 9%/8% for FY22E/FY23E, factoring in a) continued ramp-up in Illumya, led by the Specialty portfolio, b) healthy growth in the base DF portfolio as well as additions to the COVID portfolio, and c) subsequently better operating leverage. We continue to value SUNP at 25x 12M forward earnings to arrive at TP of INR740. Maintain Buy.

Outlook

Accordingly, we raise our TP to INR830 on a 25x 12M forward earnings basis. We remain positive on SUNP on its superior execution in the global Specialty portfolio / Branded Generics and a robust ANDA pipeline. Maintain Buy.

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