Sun Pharma Q3 Results Review - Specialty Scale Up To Drive Growth: Yes Securities

Yes Securities Report

Sun Pharmaceutical Industries Ltd.'s reported another steady quarter on back of traction in ex-Taro U.S. business aided by milestone receipts from Almirall. Management expects R&D to inch up somewhat in Q4 and is tracking at just over the high single digit revenue run rate guided for FY24.

As we assess triggers over the next one-two years, Nidlegy approval in Europe and deuruxolitinib are the closest to expanding specialty pipeline which in itself is growing at a healthy pace.

Domestic business to benefit from couple of in-licensing products as well as better-than-market volume growth. Expect U.S. business to sport continued momentum especially Taro even as ex-Taro generic business continues to stay lackluster amidst R&D focus on specialty assets.

We resume coverage and assign 'Add' rating based on 30 times FY26 price to earning for a target price Rs 1,570. Lack of acceleration in U.S. in FY25 and FY26 would be key risks in our view.

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