Sun Pharma Q3 Results Review - Inline; India, U.S. Outperformers For The Quarter: Motilal Oswal

Motilal Oswal Report

Sun Pharmaceutical Industries Ltd. delivered in-line earnings for Q3 FY24. Sun Pharma delivered robust performance in domestic formulation, specialty portfolio, U.S. generics as well as the rest of the market market.

This was partially offset by subdued show in emerging markets for the quarter. The research and development expenditure remained lower than earlier guidance, partly driving better profitability for the quarter.

We raise our earnings estimates for FY25/FY26 by 4%/5%, factoring-

1. superior execution in global specialty sales,

2. revival in growth prospects in Taro, and

3. industry-beating growth in the branded generics DF market.

We also raise our PE multiple to 28 times (from 26 times earlier), factoring-

1. increased contribution from specialty and branded generics portfolio,

2. expanding specialty portfolio by adding new molecules as well as utilizing existing molecule for alternate indications, and

3. robust acquired new drug application pipeline, comprising niche products.

Accordingly, we arrive at a price target of Rs 1,635.

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