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Systematix Research Report
Sun Pharmaceutical Industries Ltd.'s reported a strong performance in Q1 FY24 with Ebitda expanding 19% QoQ and margins improving 230 basis points QoQ and was above consensus expectation.
The strong performance was led by lower other expenses on a QoQ basis (lower 7% QoQ) and strong growth in North America which was up 10% QoQ and seems to have been led by ramp up of recent launch of gRevlimid in the U.S.
Global specialty revenue declined QoQ in low single digit terms owing to seasonal weakness in Levulan. The strong growth in North America was partially offset by dull growth in India (5% YoY).
One of the reasons India business growth was impacted being patent expiry of one of its key products (sitagliptin).
We revise our estimates on Sun Pharma to account for stronger trend in North America and also tweak our cost forecasts.
Based on our revised estimates we raise our target price to Rs 1,194 from 1,125 and lower our rating to 'Hold' from 'Buy' considering the limited upside at current market price (25 times on FY25E EPS).
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